Roller coaster markets ride on amid ongoing pandemic crisis

The novel coronavirus outbreak has transformed the world’s bullish stock markets into a seemingly unending and nauseating roller coaster ride, which has proved hard for many investors to stomach.

From the Dow Jones experiencing its worst drop in history on February 27 to enjoying its best day since 1933 on Tuesday, violent stock market swings of an unprecedented scale look set to continue – at least until confidence is restored in global measures to contain the outbreak.

Analysts have been quick to warn that recent rallies, including the Wall Street rebound witnessed on Tuesday as US lawmakers moved toward a $2 trillion stimulus deal, should be seen within the wider downward trend.

“Why are markets fluctuating dramatically? Markets always look forward, and, as we all know, there is tremendous uncertainty regarding the coronavirus that is certainly dampening market enthusiasm,” Leader Capital Markets macroeconomist Yonatan Katz told The Jerusalem Post.

“Markets would really like to see a more concrete sign, or any concrete sign, that the number of newly infected people is stabilizing, and not a geometrical increase.”

Temporary bear market corrections, Katz said, are likely reflections of excitement caused by major central bank activity or new fiscal strategies, including governments announcing huge expenditure increases to support the economy.

“Markets are now more focused on Europe and the United States,” Katz said. “The big question is whether the United States goes towards an Italian scenario, which would be pessimistic for the market, or manages to get the outbreak under control.”

At times of sharp market fluctuations, global markets tend to move in sync, with the Israeli market particularly impacted by international trends. Mirroring the previous day’s gains on Wall Street, the Tel Aviv Stock Exchange’s benchmark TA-35 index also enjoyed a positive start on Wednesday before closing down 0.85%. The TA-125 index closed up 0.25%.

Wall Street rose in choppy trading on Wednesday, building on the previous session’s gains. After seesawing in early trading, the blue-chip index added 5%, boosted by a 30.4% jump in Boeing Co. as sources said the planemaker may restart production of 737 MAX jet by May, setting up the stock for its best day since 1981.

But with fears of a global recession and corporate defaults running high amid a breakdown in business activity, traders said one of the biggest routs on Wall Street may

did what the Likud has claimed it would do for years – work to undermine the separation of powers in Israel and the court’s independence.