Financial markets fell on Monday as investors faced with evidence that a sharp drop in the world’s largest economies may already have begun.
The drop occurred even after the Federal reserve took the extraordinary steps Sunday afternoon to support the American economy, signaling that the economic crisis is unfolding, when businesses are closed, and the borders closed to contain the coronavirus.
The S & P 500 index fell by 12 percent, which is its biggest decline after the crisis of 1987. He has lost almost 30 percent from its peak last month, canceling all their profits from may 2017.
The financial downturn was global, major indexes in Asia, Europe and the United States fell on Monday.
Market drop followed the grim economic news: manufacturing activity in China, one of the largest economies in the world, fell to 13.5 percent last month compared with February last year, while investment in China fell by about 25 percent.
And one of the first pieces of data on economic activity in the United States for March, an indicator of manufacturing activity in new York state showed the worst decline in one month, falling to its lowest level since 2009.
“Unfortunately, this is the new reality. This report is the harbinger of the coming future“, — wrote economic analysts of investment Bank Jefferies in new York.
Energy prices also fell sharply, as investors became the reason of a significant slowdown in economic activity.