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Stock Market Bloodbath: S&P, Dow Down More Than 7% In Worst Drop Since 2008

Topline: A surprise price war between oil producers Saudi Arabia and Russia, compounded by intense investor anxiety over the continued spread of the coronavirus, triggered massive market losses on Monday.

  • The Dow Jones Industrial Average lost 7.8%, or 2,014 points, the S&P 500 lost 7.6%, and the Nasdaq Composite lost 7.3%.
  • Early losses of 7% for the S&P 500 triggered the market’s circuit breaker mechanism, which halts trading for 15 minutes to prevent stocks from free-falling and give investors a chance to reassess.
  • The yield on the 10-Year U.S. Treasury bond plummeted to below 0.4%, signaling that investors are continuing to flee risky assets like stocks in favor of safer ones like bonds and gold.
  • Oil prices plummeted by more 20% during the day, seeing their worst drop since the Gulf War in 1991; the financial services sector also suffered, with shares of JPMorgan down nearly 13% and the Financial Select Sector ETF falling 10%.
  • Shares of Clorox hit a new 52-week high of $177 per share on Monday as investors flocked to the producer of cleaning products and disinfectants.

Key background: Over the weekend, Saudi Arabia—the world’s largest oil exporter—slashed its prices to levels not seen in 30 years after it could not convince Russia to agree to production cuts. The 14 members of OPEC (the Organization of the Petroleum Exporting Countries) along with some non-members, including Russia, met last week to discuss how to respond to the lagging demand caused by the spreading coronavirus. After negotiations fell apart, Saudi Aramco, the Saudi state-owned oil company, said it will offer major discounts in order to win over buyers. It’s planning to boost production to more than 10 million barrels a day and has even told some market participants that it could raise production to a record 12 million barrels a day, Bloomberg reports. Oil prices had lost more than 30% by Monday morning in response to the sudden supply shock.

Tangent: Shares of the world’s largest oil producers like BP and Royal Dutch Shell plummeted alongside global markets on Monday. Shares of BP dropped 19.2% to $25.25 on Monday— that translates to more than $20 billion in lost market value since the close of markets on Friday, and Royal Dutch Shell dropped 15.2% to $18.00 per share—that’s $25 billion in value lost.

Chief critic: President Donald Trump weighed in on Twitter about the market’s drop on Monday morning, writing, “Saudi Arabia and Russia are arguing over the price and flow of oil. That, and the Fake News, is the reason for the market drop!”

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Source: Stock Market Bloodbath: S&P, Dow Down More Than 7% In Worst Drop Since 2008

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John Kilduff, CNBC contributor specializing in energy trading, talks with Rachel Maddow about the dynamic between Saudi Arabia and Russia that has caused the price of oil to drop precipitously and clobbered a stock market already crippled by coronavirus concerns. Aired on 3/9/2020. » Subscribe to MSNBC: http://on.msnbc.com/SubscribeTomsnbc MSNBC delivers breaking news, in-depth analysis of politics headlines, as well as commentary and informed perspectives. Find video clips and segments from The Rachel Maddow Show, Morning Joe, Meet the Press Daily, The Beat with Ari Melber, Deadline: White House with Nicolle Wallace, Hardball, All In, Last Word, 11th Hour, and more. Connect with MSNBC Online Visit msnbc.com: http://on.msnbc.com/Readmsnbc Subscribe to MSNBC Newsletter: http://MSNBC.com/NewslettersYouTube Find MSNBC on Facebook: http://on.msnbc.com/Likemsnbc Follow MSNBC on Twitter: http://on.msnbc.com/Followmsnbc Follow MSNBC on Instagram: http://on.msnbc.com/Instamsnbc Saudi Arabia Seizes Oil Market By The Throat; Stock Market Shokes | Rachel Maddow | MSNBC

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Global Markets Plunge Over Coronavirus And Oil Price War Fears

Topline: Global stocks plunged after crude oil posted its biggest fall since the 1991 Gulf War after Saudi Arabia launched a price war with Russia.

  • Japan’s Nikkei index fell more than 5% on Monday, while stocks in Hong Kong and mainland China were also down as panicked investors in Asia flocked to safe-haven assets like government bonds and the Japanese yen.
  • European stocks followed suit, with London’s FTSE 100 index down almost 8% on Monday morning, France’s CAC 40 more than 7% and Germany’s DAX 6%.
  • The pan-European Euro Stoxx 50, measuring the Continent’s 50 largest companies, plunged more than 6% on Monday morning, its worst performance in more than a year.
  • U.S. futures were sharply down, with S&P 500 futures down more than 5%.
  • Oil prices plummeted with the benchmark Brent crude down to $33.20 a barrel, while West Texas Intermediate fell 31%, to $28.32 a barrel on Sunday.
  • The steep drop was triggered after Saudi Arabia announced it would raise production after OPEC’s deal with Russia to supply collapsed on Friday.

Big number: Some $90 billion ($140 billion AUD) was wiped off Australia’s markets on Monday, with the benchmark ASX falling more than 7%—its worst performance since the global financial crash.

What to watch for: Oil prices could drop to a low of $20 a barrel, Goldman Sachs analysts warned on Sunday, if the coronavirus continues to spread and the oil price war intensifies.

Key background: Global markets have posted some of their steepest falls since the 2008-2011 financial crisis with panicked moves from investors spooked by the potential impact of the coronavirus on the global economy, and an oil price war. The Federal Reserve’s emergency rate on March 3, 2020, provided a momentary confidence boost for the markets, which now will look for coordinated action from the G7 club of advanced economies to underpin the global economy.

Tangent: Some 110,000 people globally have been infected with Covid-19 to date, but as of Monday the number of new cases in China, where the pneumonia-like virus was detected, appear to be falling, while cases around the world continue to prompt strict quarantine measures, particularly in Italy, now the largest cluster of Covid-19-related deaths outside China.

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I am a breaking news reporter for Forbes in London, covering Europe and the U.S. Previously I was a news reporter for HuffPost UK, the Press Association and a night reporter at the Guardian. I studied Social Anthropology at the London School of Economics, where I was a writer and editor for one of the university’s global affairs magazines, the London Globalist. That led me to Goldsmiths, University of London, where I completed my M.A. in Journalism. Got a story? Get in touch at isabel.togoh@forbes.com, or follow me on Twitter @bissieness. I look forward to hearing from you.

Source: Global Markets Plunge Over Coronavirus And Oil Price War Fears

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The economic consequences of the coronavirus epidemic have sparked a conflict among major oil-producing nations. Last week, oil producers were unable to agree on a reduction in production volumes, resulting in a price war between OPEC and Russia. That has sent oil prices plummeting. The price of oil collapsed by 31.5 percent at the start of trading, the lowest price since January 1991. As a reaction, stock markets fell sharply this Monday: In Tokyo, the Nikkei Index lost more than 5 percent, while the Hang Seng in Hong Kong fell almost 4 percent. Australia’s ASX Index fell particularly hard with a minus of 7.3 percent and in Germany, the DAX tumbled almost 8 percent at the start of trading. The picture around the Gulf is even more dramatic – markets have shed up to around 10% there. Subscribe: https://www.youtube.com/user/deutsche… For more news go to: http://www.dw.com/en/ Follow DW on social media: ►Facebook: https://www.facebook.com/deutschewell… ►Twitter: https://twitter.com/dwnews ►Instagram: https://www.instagram.com/dw_stories/ Für Videos in deutscher Sprache besuchen Sie: https://www.youtube.com/channel/deuts… #Coronavirus #StockMarket #Economy

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The Quickly Changing Global Oil Markets – Dan Eberhart

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How quickly things can change in oil markets. A month ago the industry was fixated on Iran sanctions, possible supply shortages and a lack of global spare production capacity  issues that drove benchmark Brent oil prices over $86 a barrel in early October. Fast forward to now: Brent is down 20% to around $66 a barrel while US benchmark West Texas Intermediate (WTI) is at about $56 a barrel. Saudi Arabia is calling for 1 million barrels per day of production cuts from its OPEC peers and non-OPEC allies, led by Russia, from 2019. So what’s changed? A lot…………

Read more: https://www.forbes.com/sites/daneberhart/2018/11/16/the-quickly-changing-global-oil-markets/#1d36b9863cb2

 

 

 

 

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Crypto and Oil Market Slumps Are Sign of Approaching ‘Flash Crash’ in Markets – Ana Alexandre

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Analysts from Bank of America Merrill Lynch have said that the crash in cryptocurrency and oil markets are indicators of a looming “flash crash” in markets, Reuters reported Nov. 16. The strategists reportedly suggested that rising volatility across various asset classes and deleveraging, such as that which happened in oil markets over the past weeks, are signs of the evolution of a bear market. On Nov.14, Bitcoin (BTC) price slumped below $5,400, while total market capitalization of all cryptocurrencies dropped as low as $174 billion. The price dive marked a new volatility record for markets this year…………..

Read more: https://cointelegraph.com/news/report-crypto-and-oil-market-slumps-are-sign-of-approaching-flash-crash-in-markets

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China Stops Buying U.S. Oil, Two Months After Record Total – Ken Roberts

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China has turned off the U.S. oil spigot. A response to the full-on trade war between the United States and China, it is a both a stunning turn-around, coming just two months after record exports there, and a stark reminder of the difference between what it means to live in a free country and one that is not. In 2017, China accounted for 20 percent of all U.S. oil exports. It played an out-sized role in the United States’ fastest-growing significant export and trailed only Canada for market share…….

Read more: https://www.forbes.com/sites/kenroberts/2018/10/18/china-stops-buying-u-s-oil-two-months-after-record-total/#2beb67655d00

 

 

 

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Norway’s Equinor Shows Big Oil Can Survive Putting A Price On Carbon – Christopher Helman

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Norway, thanks to decades of oil and gas drilling in its coastal waters, has the world’s largest sovereign wealth fund, with more than $1 trillion in invested assets. That’s equivalent to roughly $200,000 for each of the 5.2 million Norwegians. Rare among those struck with the “resource curse,” Norwegians feel kind of sheepish about owing their birthright to fossil fuels. Among the world’s most zealous environmentalist states, Norway has pledged to become “climate neutral” by 2030, and has imposed all manner of emissions trading and carbon taxes to get there…….

Read more: https://www.forbes.com/sites/christopherhelman/2018/10/12/norways-equinor-shows-big-oil-can-survive-putting-a-price-on-carbon/#5cd5b73a5c05

 

 

 

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What Oil at $100 a Barrel Would Mean for the Global Economy – Enda Curran & Michelle Jamrisko

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Rising oil prices are prompting forecasts of a return to $100 a barrel for the first time since 2014, creating both winners and losers in the world economy. Exporters of the fuel would enjoy bumper returns, giving a fillip to companies and government coffers. By contrast, consuming nations would bear the cost at the pump, potentially fanning inflation and hurting demand. The good news is that Bloomberg Economics found that oil at $100 would mean less for global growth in 2018 than it did after the 2011 spike. That’s partly because economies are less reliant on energy and because the shale revolution…..

Read more: https://www.bloomberg.com/news/articles/2018-09-30/what-oil-at-100-a-barrel-would-mean-for-the-world-economy

 

 

 

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