In total there were more than $3 trillion that disappeared in just five trading days in the North American market alone, with the particularity that on Friday the volume was absolutely unusual with 19.31 billion trades made, more than double the average of the last month which is 9.25 billion and even more than the normal average of 7 billion a day. It was certainly a typical day of exhaustion, or exhaustion to use the most technical term in the market. This does not mean that the correction ended here because the feeling is still quite unstable and only the level of correction has been reached, with the Bears’ territory still distant, however, as I have mentioned last week, the increased noise of fear led to the predictable intervention of the Fed, at this stage still very cautious with its president Jerome Powell saying that the largest economy in the world is still growing robustly, but that the central bank is prepared to intervene if necessary.
Photo by Carl Nenzen Loven.
These and other indications mean that analysts are already anticipating a cut in interest rates in the USA for this month, with Bank of America even indicating that this will be 0.5%, which could lead to a rebound of relief, we’ll see if it will be enough. In any case, instability and caution may dominate this week, not least because the data that came out of China on Saturday on the manufacturing purchasing managers’ index was devastating, with a contraction to 35.7, well below the 50 that indicate stagnation. and with the services sector falling into the abyss to its lowest ever 29.6. Estimates indicate that at this stage the factories are operating between 60% and 70% of their capacity in the second largest economy in the world, and at the end of the month the number may be 91%, therefore a delayed normalization and if not the situation of coronavirus progression in China worsens.
