Day Ahead: Top Things to Watch for March 18

• 2020-03-18
• Traiding Idea

The US dollar surged on the Forex as the Dow Jones Index rose more than 800 points. The Dow Jones stock index rose 5.20% to 21,237 points last night. The S&P 500 index rose 6% to 2529 points, and the Nasdaq index jumped 6.23% to 7334 points. Financial market conditions are changing, and this has made investors unable to agree on asset pricing. The crude oil market is volatile and has reached its lowest level since the year 2003.

In Asia, the market is volatile. While the Australian stock index fell 6 percent, Japan's stock index rose more than 3 percent. The Hong Kong stock index has also lost its previous growth, And the Australian and Japanese governments have increased their bond yields.

After the US stock market crashed on Monday, The US government has announced a massive new package to combat the effects of Covid-19 on the economy. Trump has pledged to delay the payroll tax, give cash payments to Americans, and lend to small businesses cheap loans. The new US government support package has restored investor confidence, But this was a temporary optimism.  Cash injections cannot solve the current crisis.

The US Treasury has announced that if the government does not take action against the Coronavirus, the US unemployment rate could rise by up to 20%. Despite the US $ 1.2 trillion support package, liquidity shortage still felt in the US money market. The production and supply chains have been destroyed. The Japanese government has also announced that it will reduce its exports once again.

From a fundamental analysis point of view, there is no hope of restoring peace to stock markets until coronavirus is prevented.