Publisher's note: This informational nugget was sent to me by Ben Shapiro, who represents the Daily Wire, and since this is one of the most topical news events, it should be published on BCN.
The author of this post is Joseph Curl.
Amid fears over the coronavirus and an oil war, global markets plunged on Monday as oil prices had their biggest fall since the 1991 Gulf War.
Japan's Nikkei index fell more than 5% on Monday, and European stocks also plunged, with London's top index down nearly 8%. France's CAC 40 dropped more than 7% and Germany's DAX was down 6%.
In the U.S., the Dow Jones, S&P 500 and Nasdaq futures were all down more than 12% from their recent all-time highs. Dow futures were down more than 1,200 points just before the markets opened. Shortly after they opened, the Dow was down more than 1,800 points. Stock trading halted for 15 minutes after the S&P 500 cratered 7%.
The market drops came after oil prices plunged by almost 25% late Sunday as producers squabbled over production and supply. Benchmark Brent crude dropped down to $33.20 a barrel, while West Texas Intermediate fell 31% to $28.32 a barrel on Sunday.
"The steep drop was triggered after Saudi Arabia announced it would raise production after OPEC's deal with Russia to supply collapsed on Friday," Forbes
reported. Oil-producing countries are arguing how much to cut production to shore up up prices.
The losses followed a 10.1% drop in U.S. oil prices, on Friday, the largest in more than five years.
"Saudi Arabia also reportedly planned to boost its oil production by well over 10 million barrels per day," Fox News
reported. "West Texas intermediate crude was plunging more than 22 percent, the biggest loss since the launch of Desert Storm in 1991, to the lowest levels since February 2016. Safe-haven gold surged above 1,700 per troy ounce for the first time in seven years. Demand for energy was falling as people cut back on travel around the world. The worry has been that the outbreak globally will slow economies sharply, meaning even less demand."
The markets are also skittish over the spread of the coronoavirus (COVID-19). There are now more than 111,000 confirmed case across the globe, and the number of deaths is nearly 4,000. In the United States, there are now 566 confirmed cases, and Americans are already in the throes of panic, emptying grocery stores of water, toilet paper and soap.
The virus can be deadly for the elderly or already sick, but reportedly hits healthy people with mild to moderate symptoms. But there is still fear across the globe over its spread.
"The abrupt plunge in markets added to the anxiety over the coronavirus, rattling markets and sending investors in search of safe havens like bonds,"
The Associated Press reported.
- "A blend of shocks have sent the markets into a frenzy on what may only be described as 'Black Monday,'" said Sebastien Clements, analyst at financial payments platform OFX.
- "A combination of a Russia vs. Saudi Arabia oil price war, a crash in equities, and escalations in coronavirus woes have created a killer cocktail to worsen last week's hangover." ...
- "Global recession risks have risen," Moody's Investors Service said in a report. "A sustained pullback in consumption, coupled with extended closures of businesses, would hurt earnings, drive layoffs and weigh on sentiment."
reported that while Americans would enjoy paying less for gas, the drop in oil prices would hurt in the long run.
"It's probably a net negative for the world economy that oil prices have fallen,"
said Simon MacAdam, global economist at Capital Economics in London.
"You will now have pain on oil producers and on investment, and you won't have an uptick in consumer spending because they aren't comfortable because of the virus concerns,"