The Swiss stock market has today lost Start at 11 percent. The price of Oil has halved since the beginning of the year. How comes it to such an extreme price movements? In the Moment more shocks to come together at the same time. Since the spread of the Coronavirus, which Stokes Fears of a global recession is once. The oil price crash over the weekend is weakening the solvency of Oil-producing countries and companies. Together with the rest of the current fear factors leads to extreme Stress in the markets.
in the 70s a global recession due to high Oil prices has been triggered. Why are low prices a Problem now? In the 70s increased due to the high Oil prices, the cost of which has led to the Giftmix of Inflation and recession. A lower Oil price would have then relieved the consumers. Now, however, this helps little, because the demand falls as a result of the crisis in connection with the Coronavirus, and thus the oil.
What is the role Saudi Arabia plays as the most important oil-producing country? the behaviour of the Saudis is emotional and irrational. Because Russia is not participating in a oil restriction to the support of the price, now want to turn to the Saudis for the oil supply, a fortiori, that leads to a further price collapse.
"Many small and medium-sized enterprises, a bankrupt."
The collapse of the stock market prices and the price of Oil is also associated with Stress in the U.S. capital markets. Companies are finding it difficult to come to money. This is in the U.S., and measurable, because that's where 80 percent of corporate financing via the capital markets, i.e. bond, to be running. Especially companies from the energy sector must now pay massive spreads, to come to money. Because of the Liquidity, the US Central Bank, the Fed, the capital markets last Tuesday, the benchmark interest rate surprising and outside the timetable for such Decisions by half a percentage point reduced. For reassurance, the not but. The measure has rather the impression, even at the Fed's rule because of the Virus of panic.
In Europe, dominate in the financing of the companies, the banks. What is shown here? In Europe, the companies are financed to 80 per cent on the banks. That explains why their shares are especially strong. Due to the slump in demand and the restriction measures as a result of the virus crisis, many small and medium-sized enterprises are heavily loaded. Many a bankrupt. This falls back on the banks as lenders. And increases inversely to the pressure on the policy, here, finally stabilizing to intervene.
You can also find the view of the slump in the stock markets show the Bursting of a bubble, because the prices have risen for more than ten years. What do you say? I can not connect me. The reason for the corrections in the market perception of sharply rising recession risk. What we are seeing now goes far beyond a healthy course correction.
Created: 09.03.2020, 15:00Updated Date: 09 March 2020, 16:01