World Markets in Turmoil

Last week was bad for world markets. This week might be worse, the way things are starting out. Global stock markets and oil prices plunged Monday after a fight among major crude-producing nations jolted investors who already were on edge about the surging costs of the coronavirus outbreak, per the AP. The main stock indexes in London and Frankfurt were down by almost 7%. Tokyo closed down 5.1%, while Sydney lost 7.3% and Shanghai was off 3%. Dow futures were down almost 5%, pointing to a drop of 1,200 points at the open, reports the Wall Street Journal. The benchmark US crude price was down 20% after falling as much as 30%, deepening a rout that began when Saudi Arabia, Russia, and other major producers failed to agree on cutting output to prop up prices.

A breakdown in their cooperation suggested they will ramp up output just as demand is sliding. The abrupt plunge in markets added to the anxiety over the coronavirus, rattling markets and sending investors in search of safe havens like bonds. "A blend of shocks have sent the markets into a frenzy on what may only be described as 'Black Monday,'" said Sebastien Clements, analyst at financial payments platform OFX. "A combination of a Russia vs. Saudi Arabia oil price war, a crash in equities, and escalations in coronavirus woes have created a killer cocktail to worsen last week’s hangover."

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