Is covid19 a blessing or a curse for investors ?
Corona virus is a zoonotic type of virus, transmitted from animals to humans. It is transmitted among humans through coughing sneezing, or even shaking hands. The virus can live for several hours on many types of surfaces, including clothes. To get infected, it’s sufficient once on your fingers, to simply touch your mouth, nose or eyes. The good news is that washing your hands with soap greatly reduces the risk of any infection. This pandemic sees many governments placing people in forced quarantine. Starting with China, but also countries in the west like Italy. Where public events have been cancelled and schools are closed, and whole regions are isolated in parts of northern Italy.
China has cordoned off the whole province of Hubei, where the virus started. Companies like Apple, Tesla, Samsung and Microsoft all have factories in China, which have been shut down. These events may cause a deceleration in GDP, or even recession, as travel and the capability to work is hindered.
The world has had more than a decade since the 2008 financial crisis to prepare for another global downturn. Following effects on market :
King Dollar is creating a new headache for virus-battered economies globally, with emerging markets especially vulnerable as they try to cope with collapsing currencies and plunging demand. Investors are fleeing emerging markets in record numbers and piling into the safe-haven greenback, with two emergency interest-rate cuts this month by the Federal Reserve doing nothing to diminish the dollar’s appeal. Outflows from emerging markets are already at record levels, reaching $30 billion in 45 days amid the virus outbreak, according to the Institute of International Finance. It’s not just emerging markets that have suffered at the hands of the dollar’s rally. The Aussie fell to its weakest level since 2003 — a cause for concern given it’s likely to push up import costs without any of the normal offset benefit.
Gold fell more than 2.5% on Wednesday as concerns over the global economic impact from the corona virus outweighed stimulus measures by the United States, forcing investors to dump most assets for the safety of cash. On Tuesday, gold had risen over 2% after the U.S. Federal Reserve said it would reinstate a funding facility used during the 2008 financial crisis to get credit directly to businesses and households on fears of a liquidity crunch due to the virus. The Trump administration pursued a $1 trillion stimulus package that could deliver $1,000 checks to Americans within two weeks to cushion the economy. Elsewhere, auto catalyst palladium dropped 3.6% to $1,584.64 per ounce, while platinum fell 1.9% to $648.74. Silver was 2.8% lower at $12.24.
Oil briefly traded below its lowest settlement price in almost 17 years as the corona virus pandemic threatens to bring the global economy to a standstill, battering demand just as supply explodes. The market is finding little succor in global efforts to stem the economic fallout. The U.S. Federal Reserve on Tuesday announced the restart of a financial crisis-era program in an effort to stem the economic impact from the virus. While U.S. stocks rebounded from the biggest rout since 1987 on the plan, oil continued its slide as Saudi Arabia signaled its intention to ship a record 10 million barrels a day in April. The supply and demand shocks have hammered Wall Street’s outlook for oil. Goldman Sachs Group Inc said consumption is down by 8 million barrels a day and cut its Brent forecast for the second quarter to $20 a barrel.
Traders/Investors are having fear to invest their money, But this the best time to invest into the market if you know “Trend Trading”. Amidst this COVID19 the movement in market is terrific. In forex, pairs are performing 200–300 pips movement in single day. While Gold giving 100–150 dollar movement. So this is how you can take advantage of this outbreak in your trading.