By
Chimamanda U. Martha
May 10th, 2024
Spain, Italy, France, and Germany all recorded over 100,000 COVID-19 cases. As hopes for the sooner recovery from the virus started fading, global stocks and market indices suffered on Wednesday.
The number of coronavirus cases in the U.S. has hit a new record. On Wednesday, it surpassed 400,000, doubling in just one week. The number of deaths in the country reached 12,864. The U.S. is reporting most COVID-19 cases worldwide, followed by Spain, Italy, France, and Germany. The coronavirus statistics are deplorable, and cannot help but take a toll on global stocks that have turned negative.
In the U.S., the Dow Jones Industrial Average decreased yesterday by 0.12% to 22,653.86. In pre-market today, it is further lowering, being 0.30% down at the moment of writing, at 22,585.20. Nasdaq Composite closed 0.33% down, at 7,887.26. S&P 500 also lost 0.16% to be at 2,659.41. It has plunged by another 0.24% by the moment of writing.
Tech stocks have lost momentum as well. For example, Apple Inc (NASDAQ: AAPL) tanked by 1.16% to close at $259.43 on Wednesday. Boeing Co (NASDAQ: BA) stock lost 4.83% to end the session at $141.58. Microsoft Corporation (NASDAQ: MSFT) stock plunged by 1.08% and closed at $163.49.
Some retailers’ stocks suffered as well. For instance, Walmart Inc (NASDAQ: WMT) and Kroger Co (NASDAQ: KR) stocks downgraded by 3.24% and 2.36% accordingly.
European Markets Decline
Wednesday was not the best day for European markets as well. As Spain, Italy, France, and Germany all recorded over 100,000 COVID-19 cases, hopes for the sooner recovery from the virus started fading. Stocks were the first to react to this downbeat mood.
European market index STOXX 600 plunged 0.7%. London’s FTSE 100 dipped by 0.9%, Germany’s DAX tanked by 0.8%, France’s CAC 40 lost 1.57%.
The decline in the European market coincided with Eurozone finance ministers’ failure to agree on more support for their coronavirus-affected economies. In particular, they did not come to a common decision on the new lending from the European Stability Mechanism (ESM), the common currency area’s fund. The Netherlands are demanding strict rules and fiscal targets for the borrowing, while Spain and Italy want the lending rules to be more elastic.
Michael Hewson, the chief market analyst at CMC Markets UK, commented:
“The meeting was supposed to be about arriving at a roadmap for an exit strategy from coronavirus later today, which would include how to unlock the power of the European Stability Mechanism, the EU’s bailout fund to help those most affected by the pandemic.”
He added:
“France, Spain and Italy want to make progress on plans for a joint debt instrument. However, the more fiscally conservative countries like Germany are more skeptical, and reluctant to sign blank cheques.”
Asian Markets Down
Asian markets are also downgrading, with the exception of Japan. China’s SSE Composite Index dropped by almost 0.2%, while Hong Kong’s Hang Seng was 1.3% down at the close.
Japan made an exception as the Japanese Prime Minister Shinzo Abe declared a state of emergency and announced a record economic stimulus package of 108 trillion yen ($988 billion) to support struggling households and businesses. As a result of such policy, Japan’s Nikkei index rose by around 2.1%.
Hopefully, global stocks will soon recover. According to some experts, this recovery will not be rapid but gradual and ti-consuming.