The Dow Jones Industrial Average lost 3,500 points last week, vaporizing about $6 trillion in investors’ assets.
After back-to-back 1,000-point drops during the seven-day rout, stocks last Friday shaved that day’s loss to 356 points, indicating the virus-sparked panic may be fading and confidence cautiously returning.
Markets in Europe and Asia lost about 3 percent of their values last week.
As the stock market deepened its multi-day plunge, President Trump, in his version of “the fundamentals of the economy are sound” promo-booster, tried to convince money junkies on the Street to keep gambling, tweeting “the stock market is starting to look very good to me!”
After a seven-session down streak, on Monday, the Dow had its best day in a decade on bets central banksters would juice the markets with more cheap money, i.e., lower interest rates.
Early Tuesday morning, Trump blasted Federal Reserve for not lowering interest rates after the Australian central bank cut its rates to record lows.
Trump said, “Australia’s Central Bank cut interest rates and stated it will most likely further ease in order to make up for China’s coronavirus situation and slowdown… Other countries are doing the same thing, if not more so. Our Federal Reserve has us paying higher rates than many others, when we should be paying less.” The president said Fed Chair Jerome Powell, “called it wrong from day one.”
Shortly thereafter, in a no-surprise move, the Federal Reserve cut its benchmark interest rate by 50 basis points because “The coronavirus poses evolving risks to economic activity.”
In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate.
Still not happy with even the 50 basis point cut back, the largest reduction since the Panic of ’08, which lowered the federal-funds rate to a range between 1 percent and 1.25 percent, Trump tweeted: “The Federal Reserve is cutting but must further ease and, most importantly, come into line with other countries/competitors. We are not playing on a level field. Not fair to USA. It is finally time for the Federal Reserve to LEAD. More easing and cutting!”
Yet, with the world in panic mode, the Dow dove 800 points as all sectors of society – public, private, and personal – took measures to avoid catching the virus.
TREND FORECAST: As Gerald Celente has noted since last March, interest rates in the U.S. would be at zero to negative by October 2020.
Mortgage rates have plummeted since the beginning of the year to the lowest average since 2016.
Since U.S. mortgage rates track the direction of the yield on the 10-year Treasury note, which is now at an all-time low, mortgage refinancing will escalate.
We also forecast there will be a move away from densely populated big cities to rural areas.
And, should the virus contagion fears keep spreading, online shopping and home schooling trends will grow strongly.
Also, with the exception of health care/pharmaceuticals and related products and services, the economic downturn will crash markets and economies, pushing the world into the “Greatest Depression” this year, rather than in 2021 as previously forecast.
TREND FORECAST: With central banks around the world lowering interest rates to pump more cheap money into the failing system, investors will bail out of volatile stock markets and seek safe returns.
Indeed, in the wake of the Feds emergency rate cut to battle the economic effects of the spreading coronavirus, the 10-year Treasury yield hit an all-time low of 0.927 percent.
And, gold, the ultimate safe-haven asset, spiked some $42 per ounce after the Fed slashed interest rates 50 basis points today. Thus, we forecasts that gold prices will hit $2,000 per ounce when gold breaks above $1,725.
Shortly thereafter, in a no-surprise move, the Federal Reserve cut its benchmark interest rate by 50 basis points because “The coronavirus poses evolving risks to economic activity.”
In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate.
Still not happy with even the 50 basis point cut back, the largest reduction since the Panic of ’08, which lowered the federal-funds rate to a range between 1 percent and 1.25 percent, Trump tweeted: “The Federal Reserve is cutting but must further ease and, most importantly, come into line with other countries/competitors. We are not playing on a level field. Not fair to USA. It is finally time for the Federal Reserve to LEAD. More easing and cutting!”
Yet, with the world in panic mode, the Dow dove 700 points as all sectors of society – public, private, and personal – took measures to avoid catching the virus.