It is a new week on the financial markets, but the same key problems will continue to dominate the news and the decisions that investors will be making in the next couple of days.
First things first, the already strained oil market is facing a new challenge. The oversupplied state of the market has reached a breaking point, as the world is running out of storage space for all of the oil that cannot be sold or used at present. Thus, prices slumped to their lowest level for 2020, which is a 20-year minimum. The WTI futures today dropped all the way to $13.31.
Besides commodities, today the stock markets are also making losses. The United States, which is the strongest economy in the world and home to the highest-earning companies, is experiencing the worst Covid-19 outbreak. The labor market is under immense pressure and many companies’ shares are expected to drop massively this year.
Meanwhile, it appears that US businesses have already burned through the first set of stimulus packages. Due to the lockdown, many small companies are counting on money from the government in order to pay employees and stay in business. Another stimulus package will most likely be approved this week to continue supporting US companies.
In Europe, talks about addressing the crisis with fiscal policy continue. There is still no agreement on coronabonds, but the discussion will continue at yet another summit this Thursday.
