Despite a surprising interest rate cut by the US Federal Reserve, the Dax is seamlessly following the price slide of the previous week. At the start of the trade, it dropped to 8715 points, a decrease of 5.6 percent and the lowest level since February 2016.
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The crash since the end of February, when the consequences of the rapid spread of the virus were first clearly felt in Europe, has historical dimensions. The Dax lost around 20 percent in the past week alone – a higher weekly loss had only been seen in the global financial crisis in autumn 2008. On Thursday, the stock index closed with the second largest percentage daily loss in its more than 30 years history under the 10,000 mark. In the past three weeks, the Dax lost a third.
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The US Federal Reserve had resorted to drastic means on Sunday due to fears of a recession. In an emergency campaign, she surprisingly cut the key interest rate by a full percentage point to almost zero percent and announced a package of measures in coordination with other central banks. For its part, the EU Commission had proposed a multi-billion dollar emergency program to help companies and citizens in the coronavirus crisis.
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For example, European debt, deficit and subsidy rules should be interpreted as generously as possible so that the EU states can issue their own emergency aid. In addition, billions are to be rededicated from the EU budget in order to keep companies solvent and to enable investments.
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