More misery for rand, markets amid US fight over stimulus package
- US equity futures fell sharply after trading commenced overnight.
- The losses came as the US Senate failed to agree on a $1.6 trillion (R28 trillion) stimulus packaged designed to boost the coronavirus-stricken economy.
- The rand slumped to R17.70/$. The JSE lost almost 9% last week.
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It's shaping up to be another rocky week in the stock market. US equity futures fell sharply after trading opened overnight, triggering a limit down trading halt.
The rand has slumped to R17.70/$ as investors dump risky assets. Moody's is expected to downgrade South African government bonds to "junk" later this week.
Over the week, the US Senate failed to agree on a stimulus package designed to fight the sudden economic fallout from coronavirus. The rescue package would amount to roughly $1.6 trillion (R28 trillion) of aid, according to Politico.
Major US stock indexes are fresh off their worst week since 2008. The sudden economic slowdown forced by the global coronavirus outbreak has prompted experts all across Wall Street to warn of an imminent US recession.
The prospect of a prolonged economic contraction and the impact it will have on corporate profits have sent traders fleeing from stocks. Investors got an early sign of just how deeply coronavirus will impact the economy when jobless claims spiked to a two-year high last week.
Goldman Sachs has since forecast that the jobless claims figure from this upcoming week, due March 26, could reach a whopping 2.25 million. That would mark the largest single-week unemployment-filing surge in history - by a landslide.
In South Africa, the Reserve Bank last week said the economy is expected to shrink by 0.2% this year. The JSE's all share index plunged 9% last week.
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