Oil, Gold, Dow, Footsie, Bitcoin, Everything Falls While CNY Rises

FTSE 100 is down another 3% today while Dow shaves off another 2% in a very red week that has seen it down from close to 30,000 to now 25,000.

That circa 5,000 points fall is similar to December 2018 when then too there was a mini-panic due to the then trade war.

Oil is down another 5% to now just below $50, with gold interestingly falling too and somewhat drastically.

Why is gold falling and where is all this money going is a good question that we can’t answer.

It’s not to cryptos for now which have stabilized a bit after falling some 12%, while Shanghai stocks have recovered somewhat, but are generally sidewaying.

So the only thing somewhat up recently is the Chinese Yuan which after losing value seems to be regaining some:

The situation now is perhaps contained in China so markets there are breathing a sight of relief, while globally it has only began so markets are perhaps over-reacting a bit.

Investors are being cautious maybe because they don’t know how much this might effect the economy, with the market in addition is clearly telling politicians to get a grip on the situation.

In Italy especially for some reason they have soldiers on the street. There is no suggestion of any unrest so why such display is unclear.

Just as it is unclear why it seems all assets are reacting negatively, when you’d expect an inverse behavior between some assets.

This situation however should hopefully be temporary as we are now at peak winter, with snow falling in some part of Europe effectively “quarantining” a lot of people.

Spring should be here in a few weeks, and with spring the flu should hopefully clear. Until then the effects on the economy are probably not too significant because daily life is going on as normal by and large.

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