Stock market brief updates on 3/19

Due to the Chinese virus are spreading around the world. The stock market had a huge slaughter right now. FED cut rates to near ZERO and release liquidity (QE) to the stock market for stabilizing. ECB launched a €750B bond-buying program to stop a pandemic-induced financial rout shredding(摧毀) the eurozone’s economy. The new policy brings this year’s planned purchases to €1.1T, with the new round alone worth 6% of the bloc’s GDP.

Taiwan stock market is getting through a difficult time as well, 3/19 TSE01 slashed to 8703 points, it is under 10yr MA. Throughout history, the National Stabilization Fund in Taiwan plans to save the stock market when there was increasing volatility and system risk(Fig. below). This time national stabilization fund has $500B TWD to protect the 10yr MA and keep NTD FX rate stabilize and prevent the foreign investment from running away.

And on 3/19, Taiwan central bank announced cut 25bps, short-sell restriction if the stocks return below -3.5% yesterday. So these three arrows from the Taiwan government save the market today(3/20). And the National Stabilization Fund in Taiwan always poured their capital into bigger weighted stocks in TSE01 since it is easier to control.

source: WSB、ANUE

Speaking of the marine industry, the VLCC shipping rate is increasing from $70–100 thousand on 3/11 to $160–180 thousand on 3/12. As the oil price war got started, the VLCC shipping rate kept going up, Saudi exports their oil price at $25 a barrel is way lower than Russia’s. And it caused US shale oil cannot afford COGS of producing oil. The announcement from Saudi reveals that their export will enlarge to 12.1 million barrels started from 4/1. So we can foresee that oil prices will keep going down and the VLCC shipping rate will keep increasing in the short period. But the core point still needs to focus on the demand. Only when the vaccine is being produced, the demand can revive.

Source: shipping journal