Equities Decline Despite Government Stimulus Efforts

The generous stimuli and support packages unveiled by the US, British and other European governments are slowing down the declines in the stock markets but are not enough to stem the corona-induced ebb of money from European and US markets.

The FTSE is leading the declines in Europe with an over 4% fall; Paris, Frankfurt and Milan are following suit to a lesser extent.

Stock markets themselves are considering how to respond to requirements for social distancing and the US is pondering shortening stock exchange trading hours. There have been discussions about a two week trading holiday in the US but for the time being Treasury Secretary Steven Mnuchin sent the message that it was crucial to keep the markets open.

In Europe, apart from the travel industry, carmakers are bearing the brunt of the spread with BMW, Jaguar Land Rover and Toyota the latest to close production for a few weeks.

A small group of businesses is still doing well on the FTSE. Supermarket chains are rallying as shelves have been emptied to a much wider degree than in the week before Christmas, while safe-haven utilities are also performing well.

Lloyds (LON:LLOY) Banking (NYSE:LYG) shares are the most traded in terms of volume, and that by a significant margin. Four to six times more Lloyds Bank shares were traded over the last few days than any of the nearest high trading stocks, such as BP (NYSE:BP), Vodafone (NASDAQ:VOD), HSBC (NYSE:HSBC) and Glencore (LON:GLEN); the same pattern is in place today.

SOFT COMMODITIES HOLD UP AS METALS SLUMP
Industrial commodities like copper, aluminum and oil are continuing to slump but agricultural commodities are holding up around the flat line. The emptying of supermarket shelves is strengthening the argument in favor of wheat futures, cocoa, coffee, and sugar, which are not yet turning the corner but are not slumping like their industrial peers.