53m ago
07:20
Introduction: Markets rocked by US deadlock
Good morning,
and welcome to our rolling coverage of the world economy, the financial
markets, the eurozone and business.
We’re
entering the fifth week of the markets panic over the Covid-19 crisis, and
there’s no let-up.
Stocks have
slumped in Asia overnight, and we’re heading for another rocky start in Europe.
This latest
sell-off is triggered by the news, overnight, that the US Senate failed to
approve a massive funding package to combat the impact of coronavirus.
A key
Senate procedural vote Sunday evening was split 47-47, with Democratic senators
refusing to support a package which (they argue) fails to provide enough
support for workers who will suffer from the looming recession, while bailing
out companies.
Leading
Democrat Chuck Schumer described the plan as merely a:
...large
corporate bailout with no protections for workers and virtually no oversight.
This ‘shell
bill’ (effectively a place-holder into which the actual legislation would be
dropped into later) needed 60 votes to advance. The 47-47 split has dashed
hopes of a quick stimulus deal, with congressional leaders and the White House
failing to agree a plan.
This
stalemate had a predictably chilling impact on the markets - sending Wall
Street future crashing 5% (the maximum allowed).
Stephen
Innes, global chief markets strategist at AxiCorp, says the US political
deadlock is scaring the markets:
While other
governments around the world pour money into fiscal spending, the US can’t get
over its political squabbling. Democrats claim the money will just go to
corporates, and hence they can’t support it.
One
senator, Rand Paul, has now tested positive for coronavirus - raising concerns
that Capitol Hill could struggle to pass legislation if more lawmakers are
incapacitated.
Donald
Trump has also weighed in, tweeting that “we can’t let the cure be worse than
the problem” -- seemingly attacking the medical advice that self-isolation is
the only way to fight Covid-19.
Donald J.
Trump
✔
@realDonaldTrump
WE CANNOT
LET THE CURE BE WORSE THAN THE PROBLEM ITSELF. AT THE END OF THE 15 DAY PERIOD,
WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!
Asian
markets have suffered heavy losses (again), with South Korea’s Kospi and
Australia’s S&P/ASX losing over 5%, and China down 3%.
India’s
stock market has plunged over 10%, as it starts to implement a lockdown to slow
the virus’s spread.
David
Ingles
✔
@DavidInglesTV
Recently
has been quite bad already but even in this new normal, Monday's been quite
brutal and ugly in Asia.
Indian
stocks -10%
European
futures
-5%https://www.bloomberg.com/news/articles/2020-03-22/dollar-dips-in-early-trading-kiwi-declines-on-qe-markets-wrap?srnd=premium-asia
…
European
markets are going to take a bath too, with the UK FTSE 100 expected to drop by
4%.
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