Spreadex Market Update

FTSE at worst levels since Brexit referendum as US open heightens bloodbath



Seemingly determined to outdo themselves, the markets unleashed another round of scary losses on Friday afternoon, the US open only serving to intensify the bloodbath.

Thursday saw the Dow Jones suffered its worst ever single session drop. It might be gunning to beat that record just one day later. The US index plunged 950 points after the bell, sinking under 24,800 for the first time in almost 9 months. Just to emphasise the extent to which it has jumped off a cliff this week, 7 days ago it closed at 29,000.

With the Dow in freefall, the already substantial losses in Europe ramped up significantly. The DAX dove 4.9% to hit 11800, a fresh 6-month low, while the CAC was down 4.7% to 5250.

The FTSE was no better. Shedding 330 points the UK index found itself trading at 6470, its worst price since the fortnight after the 2016 Brexit referendum. That’s the kind of concern we are talking about. As a taste of how the UK index’s components are faring, TUI fell nearly 10%, IAG was down another 8%, and BP slid 6.4%, with BHP Group losing 6% and RBS slipping 4.2%.

What an earth happens next? The weekend may provide time for heads to cool, and allow investors to assess whether or not they want to re-enter the market at these new lows – after all, from a certain perspective the market is now far more approachable than when it was racing to all-time highs just last week.

Of course, that is only if the next few days aren’t filled with round after round of alarming headlines. From a market perspective, an explosion of cases in the US would likely be the most catastrophic turn the illness could take. Though that’s not to downplay the impact of the steadily increasing number of nations around the world now seeing their first cases of the coronavirus, each new country pushing us closer to a pandemic.

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