Equities under pressure as central banks try coming to the rescue

The sun rises to the east of the US Federal Reserve building in Washington DC. Picture: REUTERS

Japanese Prime Minister Shinzo Abe said G7 leaders would hold a teleconference at 4pm to discuss the crisis. “By any historical standard, the scale and scope of these actions was extraordinary,” said Nathan Sheets, chief economist at PGIM Fixed Income, who helps manage $1.3-trillion in assets. “This is dramatic action and truly does represent a bazooka.”

“The performance of the economy and the markets will be mainly determined by the severity and duration of the virus’ outbreak,” Sheets said. Markets have been severely strained as bankers, companies and individual investors stampeded into cash and safe-haven assets, while selling profitable positions to raise money to cover losses in savaged equities.

US President Donald Trump, who has been haranguing the Fed to ease policy, called the move “terrific” and “very good news”.

Source: Loan Digest (loandigest.net)

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