Trump just spoke about the outbreak! The dow plunged nearly a thousand points overnight! Dollar plunge! Gold surged more than $35 to above $1,670!

Overnight financial markets repeat “crazy scene”. Us stocks tumbled again, with the dow jones industrial average plunging nearly 1,000 points on fears of a new pneumonia outbreak. The dollar index fell sharply and spot gold surged more than $35 to break through the $1,670 mark. Investors will continue to keep an eye on the global outbreak, as well as the U.S. nonfarm report on Friday (March 6) to see if the outbreak has an impact on the job market. US President Donald Trump has just given a speech in the morning acknowledging the potential economic impact of the outbreak.

U.S. stocks have plunged again, with the dow down nearly a thousand points

The market remains highly volatile in the face of the rapidly spreading coronavirus. All three major U.S. stock indexes tumbled Thursday, with the dow off nearly a thousand points, or more than 3%, erasing the previous session’s gains. Both the s&p 500 and NASDAQ were down more than 3 percent.

The dow closed down 969.58 points, or 3.5%, at 26,121.28. The s&p 500 fell 3.3%, or 106.18, to 3,023.94. The nasdaq fell 3.1%, or 279.49, to 8,738.60.

Analysts said the big drop in U.S. stocks was driven by fears that the new outbreak would have a bigger impact on the economy than expected.

On March 4, California declared a state of emergency for new coronavirus deaths, and New York state confirmed 11 new coronavirus infections on March 5, raising investors’ fears of an outbreak in the United States.

Fears of a coronavirus disrupting the global economy continue to hang over Wall Street as countries around the world extend quarantines and travel restrictions. California declared a state of emergency after coronavirus related deaths and 53 confirmed cases. The number of people infected in New York City doubled overnight to 22 as the state stepped up testing.

“This is largely due to the spread of the virus and people are increasingly worried about its consequences,” said Tom Essaye, founder of Sevens Report. Every hour, another group of people get infected, and in a different state. People are a little bit anxious about the headlines that keep coming out.”

Such fears have fuelled demand for safer assets such as us treasuries and gold. The drop in yields put pressure on bank stocks, causing major stock indexes to fall. JPMorgan and Bank of America both fell about 5 percent.

Airline stocks also took a beating, leading declines in the dow, which fell into correction territory on Thursday. United airlines lost 13.4% and American airlines lost 13.2%, their biggest one-day drop since 2016.

On Tuesday, the fed cut interest rates by an emergency 50 basis points because of the “evolving risk to economic activity” posed by the coronavirus. It was the fed’s first emergency rate cut since the 2008 financial crisis.

However, the move failed to ease stock market concerns about the possible economic impact of a coronavirus outbreak and triggered wild market swings.

A total of 98,067 new cases of pneumonia have been confirmed globally, with 3,281 deaths, as of 23:00 cet on March 5, according to who data released on March 5. A total of 17,637 cases have been confirmed in 78 countries outside China.

US President Donald trump delivered his latest speech in early trading on Friday in Atlanta. Mr Trump said the outbreak could certainly have an impact on the economy and he hoped it would not last long.

Analysts say the actual outbreak in the United States could be worse because of a shortage of testing equipment.

Mr Trump said people were staying in the us and continuing to spend. He said the U.S. government was being praised for its handling of the new crown pneumonia outbreak.

As of Friday afternoon, 163 new cases of pneumonia had been confirmed in 18 states, according to a New York times summary of new cases announced by state public health departments. The Washington state department of public health announced one death Wednesday, bringing the number of deaths in the United States to 12.

Vice President Mike Pence said Thursday that the United States does not have enough new coronavirus testing kits to meet demand.

The number of new coronavirus infections in the United States has risen to 205, according to the centers for disease control and prevention and state governments.

Gold prices rose

Gold prices surged more than 2 percent to their highest level in more than a week on Thursday as fears about the global spread of the coronavirus spurred haven inflows and raised hopes of further monetary easing by major central Banks. A sharp drop in the dollar also further supported gold prices.

Spot gold rose as high as $1,674.40 an ounce in Thursday trading to close at $1,671.95, up to $35.47, or 2.12 percent.

An article on Economies.com, a leading financial news website, said gold’s strong rebound overnight, trading around $1,665.00 an ounce, reinforced expectations that the bullish trend will continue for some time to come.

With that said, the way is open for gold to hit its target of $1689.33 an ounce, according to Economies.com.

Economies.com says it is now waiting for gold to rise further. Unless gold falls below $1,633.60 an ounce and remains below that level, bullish expectations remain valid.

“The stock market is clearly under pressure, and the coronavirus concerns are increasing, so we’re clearly seeing a flight from riskier assets into safe-haven assets like gold,” said David Meger, director of metals trading at High Ridge Futures. Moreover, we still see gold as a classic hedge against the flood of central bank liquidity. Gold continues to be the trendsetter and continues to be our favorite alternative investment.”

The federal reserve and the bank of Canada both responded by cutting interest rates by 50 basis points. Eurozone markets are pricing in a 90% chance that the ECB will cut deposit rates next week.

“The impact of this virus on global growth and low global interest rates will continue to push gold higher,” Edward Moya, senior market analyst at broker OANDA, said in a note.

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