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Wall Street in red: Coronavirus fears sharpen in Chinese and global economy

Wall Street in red: Coronavirus fears sharpen in Chinese and global economy

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The first day of this week ended in red. And it is that investors installed a fear that the coronavirus will spread, generating possible blows to China’s economy and, consequently, in global growth.

The World Health Organization adjusted the risk of the coronavirus from moderate to high. So far there are more than 2,700 people infected and more than 80 dead.

The three main Wall Street indicators closed in red on Monday afternoon, in line with European and Asian stock exchanges that had earlier negative behavior. The S&P 500 lost about 1.57%; while the Nasdaq Composite fell 1.89% and the Dow Jones Industrial Average fell more than 450, 1.57%.

Along the same lines, the Mexican Stock Exchange today had its worst day in a year, with a fall of 2.23%, which led it to close at 44,134.39 points this Monday.

“Inside, losses were observed in the 35 stations that make up the Price and Quotation Index (CPI) of the Mexican Stock Exchange, although due to their weighting the losses of the communication services (-2.46%) and consumption sectors basic (-2.46%) together accounted for 555.38 of the 1,007.23 points that the index lost, ”explains Siller.

The companies most affected during the session were Alpek SAB de CV (MX: ALPEKA ) (-10.26%), Alfa (MX: ALFAA ) (-5.27%), Megacable Cpo (MX: MEGACPO ) (-4.64%), Inbursa ( MX: GFINBURO ) (-4.25%) and Peñoles (MX: PEOLES ) (-3.89%).

The Mexican peso was also ballasted in today’s session, which closed at a depreciation of 0.67% or 12.6 cents, trading around 18.91 pesos per dollar, as a result of the increased risk perception.

Japanese yen and Swiss franc are appreciated

The same luck that the Mexican peso ran most of the currencies in the basket of major crossings, with the exception of the Japanese yen (0.38% appreciated) and the Swiss franc (advanced 0.22%) due to the greater demand for refuge currencies.

Concerns about lower travel demand also affected companies in the tourism sector.

For example, American Airlines (NASDAQ: AAL ) and United Airlines Holdings Inc (NASDAQ: UAL ) airlines fell more than 5% on the stock market; and Royal Caribbean (NYSE: RCL ) Cruise fell by about 7%.

“The stock markets, the price of oil and the yield of government bonds are down due to the growth of the threat of the coronavirus. Although a first person has already been cured, the fact that it is spread before symptoms occur will make its containment more difficult, ”said analysts at Banorte (MX: GFNORTEO ) in a report today.

Oil continues to decline
A lower consumption of hydrocarbons, due to the prevention measures that follow in flights and land trips continues to affect oil prices.

“Usually in the case of epidemics, economic performance is strongly affected, particularly tourism, consumption and industrial activity. In financial markets, this translates into losses in the capital market and a sharp decrease in the prices of industrial raw materials, such as oil, ”adds Siller.

This Monday, WTI Crude Oil Futures were trading at $ 52.97 per barrel, down 2.25%.

Meanwhile, Brent futures traded at 2.42% to trade at $ 58.44.

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