Markets plunge, to remain “treacherous” for a while

Markets plunged on Monday.

The S&P 500 sank 7.6 percent, the STOXX Europe 600 tumbled 7.4 percent and the Nikkei 225 fell 5.1 percent.

Adding to market concerns over the continuing spread of the COVID-19 virus, oil prices plunged on Monday after the collapse of talks led to a price war between OPEC and Russia. West Texas Intermediate crude plunged 25 percent while Brent tumbled 24 percent.

The US 10-year Treasury yield briefly touched an all-time low of 0.318 percent.

“The shock to oil compounds what the coronavirus is doing to the global economy,” said Andrea Cicione, head of strategy at TS Lombard.

Economic data compounded the worries.

Chinese trade data released over the weekend showed that the country’s January-February overseas shipments contracted 17.2 percent from the same period a year before.

On Monday, Japan reported that its economy shrank at an annualised rate of 7.1 percent in the October-December quarter, worse than the preliminary estimate of 6.3 percent.

“This is going to be treacherous for a while,” said Mohamed El-Erian on CNBC on Monday. “I would advise most retail investors to stay on the sidelines, not panic. There will be opportunities but they’re not now.”