Market Routs Continue on Black Monday

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Echoes of Black Monday: Market sell-off could get ‘significantly worse’ – strategist

He has raised concerns around recent market moves, telling CNBC: “Without wishing to be too alarmist, there have been a few parallels to what was happening 30 years ago in terms of what’s been happening to the dollar, what’s been happening to oil prices, what’s been happening to Treasury yields.”

Derrick said that “It’s all very September/October 1987 from that perspective.” The strategist referred to the volatile market dubbed ‘Black Monday’ that began on October 19, 1987, in Asia before spreading to Europe and then the US later in the day. The Dow Jones Industrial Average then plunged more than 500 points or 22 percent in a single day.

Derrick’s worries follow last week’s market rout that saw US stocks suffering their worst loss since March, with the Dow losing almost 1,400 points in two days. According to the strategist, the current events won’t play out like they did 31 years ago. However, he warned that a “confluence of different circumstances” could lead to a serious risk-off event, leading the market to get “significantly worse” this week.

He explained that one of those circumstances was a no-deal Brexit. “The danger is that, in all of this, if we come back and there’s no deal that actually we end up in stasis, we end up in gridlock in parliament and actually the default is that we end up in the end of March with Article 50 being triggered with no deal, that’s the worst case.”

For more stories on economy & finance visit RT’s business section

Market Routs Continue on Black Monday

As markets across the world were gripped by fear, there are growing concerns that the pandemic will push a slew of vulnerable companies to breaking point.

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Today, Saga announced it has suspended cruise operations until 1 May and warned that the move will knock its profits.

The travel and insurance specialist said the move follows updated advice from the Government advising people aged 70 and over and those with pre-existing health conditions against going on cruises.

It said that while cancellations had increased in recent weeks, demand for cruises was ‘very positive’, with bookings of around 80 per cent of its sales target for the year.

Suspended: Saga announced it has suspended cruise operations until 1 May

Yesterday cinema chain Cineworld warned it could go bust if it is forced to close cinemas for up to three months.

And shopping centre-owner Intu said it could collapse if it cannot find fresh funds to prop up its finances – which will be difficult to raise in the current market – after the value of its properties fell by £2billion last year.

Helal Miah, investment research analyst at The Share Centre, said: ‘It feels like a bit of a panic on the markets at the moment – but as the days go on and you see how things are being shut down, the sell-off seems justified.

This could push fragile companies – such as those with weak balance sheets and large debts – over the edge.

Warnings from Intu and Cineworld came as big firms from all sectors, from retailers to travel companies, sounded the alarm:

● WH Smith said profits were likely to halve to £40million because travel restrictions have led to a drop in shoppers visiting its airport stores;

● Airline Norwegian announced plans to lay off half of its staff and cut 4,000 flights;

● Cruise operator Carnival’s Princess Cruises division will shut down for two months due to the virus after two of its ships became floating Covid-19 hotbeds;

● Bus and rail group Go-Ahead warned it expects fewer passengers to use its services;

● Transport booking app Trainline has seen a hit to recent trading;

● Travelex-owner Finablr said it would be difficult for the company to access cash it needs to keep the business running smoothly. After slumping yesterday, Finablr’s share price rocketed over 100 per cent today.

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