Bear market mauls investors
Plummeting share prices point to rising risk of recession
The S&P 500 Index plummeted 10% on Thursday, with futures trading lower in Asia Friday morning. Asian equity markets are down across the board. President Trump outlined steps his administration was taking to contain the COVID-19 outbreak, including banning travellers from Europe, but investors were unimpressed. Republicans and Democrats in congress may announce an agreement today on an emergency economic package. Credible policies to control the outbreak in the US, as well as significant fiscal stimulus to offset the likely drop in consumer spending due to social distancing measures, are likely needed to stem the current drop in share prices. Declining Asian exports to US and Europe will hamper Chinese efforts to reboot their manufacturing sector following the extended Lunar New Year shutdown. Reduced imports of petrochemical imports is likely to weigh on regional demand for tonnage, putting downward pressure on freights and TC rates.