U.S. Fed cuts interest rates, but markets slide
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Tuesday morning, U.S. Fed Chair Jerome Powell cut U.S. interest rates by 50 basis points in a rare emergency move. His announcement surprised some. The last such move came during the Recession a decade ago under far more dire circumstances. Markets initially responded Tuesday by spiking, but that euphoria lasted 15 minutes then markets began their day-long slide, particular in New York.
In all, the Dow swung nearly 1,300 points Tuesday, the VIX soared 26%, and all New York indices returned to correction territory, closing nearly -3%. Microsoft, for example, swung between $162 and 175, eventually shedding 4.79%. The U.S. 10-year fell below 1%. As expected, gold rallied 3%, WTI oil rose 1.35%, and WCS gained nearly that much.
Supported by gold, the TSX stayed positive for much of the day and closed only 0.46% down. Osisko Mining and Oceanagold both rallied over 12%. Other safe havens like consumer staples increased over 2% while utilities like Algonquin Power rose nearly 3%. No doubt about it: Tuesday was one of the rockiest sessions of 2020 so far and will later be read as a prudent or panic move. Regardless, street consensus says that this volatility will continue until the coronavirus eventually subsides worldwide. At least it’s starting to in China.
Ⓜ Microsoft -4.78%
👑 Osisko Mining Inc +12%
🥇 Oceanagold Corp +12%
♻ Algonquin Power & Utilities Corp +3%
