Goldman Sachs economists have made a further cut to their Q2 outlook for the US economy, blaming the revision on a number of anecdotal factors and "sky-high jobless claims numbers" resulting from the coronavirus outbreak. They now expect US economic growth to fall at a annualised rate of 34% during the quarter on a sequential basis against their original estimate of a 24% fall.
Some Wall Street traders are forgoing working from home and trading from their largely empty corporate offices, where they are better equipped to capitalize on the current volatility-driven frenzy. Many traders working from the office see this time as a seminal moment in their careers.
US equities have endured the worst quarter since the financial crisis, with all leading indices ending the first quarter in negative territory. The S&P 500 closed at 2,584.59 Tuesday, giving a Q1 loss of 20%; the Dow Jones Industrial Average ended at 21,917.16, with a Q1 loss of 23%; and the Nasdaq composite closed at 7,700.1, resulting in a Q1 loss of 14%.
HSBC, RBS, Standard Chartered, Lloyds and Barclays have complied with a request from the UK's Prudential Regulation Authority and agreed they will scrap their 2019 and 2020 dividend payments to preserve capital during the coronavirus outbreak. The lenders also pledged to review their planned bonus payments.
Euronext has invited input from market participants on reducing trading hours in European markets from the current 8am-4:30pm GMT, to either 9am-4pm or 9:30am-4:30pm. Industry groups including the Association for Financial Markets in Europe have called for hours to be reviewed.
The coronavirus outbreak has forced many European firms to suspend their annual general meetings where they would have ratified dividend payouts, which means market-makers cannot price futures and options contracts based on the Eurostoxx 50 index futures valuations.
Research from GraniteShares shows that the number of net short positions reported to the UK's Financial Conduct Authority in early March jumped 40% over the same time last year. The FCA saw 712 short positions reported between March 2 and March 16, compared to 507 short positions in 2019.
Market participants have applauded a decision by the European Securities and Markets Authority to delay enforcement of the Securities Financing Transactions Regulation until July, but many have pressed ahead with preparation for compliance. "July will be here before we know it, so although this gives firms time to work through any integration issues, they can't take their foot off the pedal," says Linda Coffman, executive vice president at SmartStream Technologies.
Deutsche Bank executives are reportedly revising their plan unveiled last July to revive the bank's fortunes, as it has encountered significant disruption due to the coronavirus outbreak.
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