The situation turned even worse for Chevron (NYSE: CVX) stock and other oil producers as President Donald Trump’s ban on travel from Europe increased the threat of economic slowdown and global recession. Dow futures plunged more than 800 points after a prime-time address by the President, Asian and European markets fell more than 3 per cent.
Oil price is adding to its previous losses as travel restrictions and suspension of business activities are likely to slash oil demand. The US has already issued travel advisory related to the Asia Pacific.
“The European [30-day] travel restriction is likely to further hammer the earnings of battered airlines and hotel companies and hurt consumer spending, which makes up 70 per cent of the economy,” says Ryan Dietrich, senior market strategist at LPL Financial.
President Trump directed Small Business Administration to provide capital liquidity to businesses; Trump is also planning to increase funding to the SBA by $50bn. The president instructed Treasury to provide $200bn in additional liquidity for some businesses by deferring taxes.
Chevron stock is among the biggest losers of Dow Jones Industrial Average; Chevron stock price slid 31% since the beginning of this year – up from Dow Jones Industrial Average drop of 18.41%. The market pundits are seeing more volatility in stock markets amid slowing European and US business activities following a massive slowdown in Asian markets.
Tradingsview analysts are predicting more selling pressure on Chevron shares based on moving averages.
The World Health Organization (WHO) declared Covid-19 a global pandemic on Wednesday. “We’re deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction,” said WHO Director-General Tedros Adhanom Ghebreyesus. “We have rung the alarm bell loud and clear.”
Japan Nikkei 225 declined 3.3% and South Korea’s Kospi also dropped 3.04%. The Australia S&P/ASX 200 plunged 5.51% while Hong Kong’s Hang Seng index dropped 3.81%.
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