McDonald's suffers more than 7% after Fed ’s unlimited QE bill rescues market

world economy

Written by: Li Fuyuan

2020-03-24 05:04

The market is concerned about the economic damage caused by the new COVID-19 epidemic in 2019. The US Federal Reserve ’s “unlimited” easing policy has failed to save the decline in U.S. stocks. After the opening of the three major stock indexes, the Dow Jones Industrial Average closed at 18591.93 points, down 582.05 points, or 3.04%; the S & P 500 index fell 67.52 points or 2.93%, to close at 2237.40 points; the Nasdaq index fell 18.84 points Or 0.27%, to close at 6686.67 points.

US Senate Minority Leader Chuck Schumer said that the Senate Democrats and Republicans are very close to reaching an agreement to stimulate the economic stimulus package; investors expect the bailout package to be approved, and the news stimulated the three major indexes to rise low, but voted Later, the Senate vetoed the bill again, seeking a speedy process to review the bailout, dragging down the house.

Apple market value falls below $ 1 trillion mark

Technology company Apple shares fell 2.12% to close at $ 224.37, and the market value fell below the $ 1 trillion mark. The report pointed out that after the outbreak of the new crown pneumonia outbreak, Apple's supply chain has been plagued by China-related issues, and Apple's current stock price has fallen by 25% from the beginning of this year. In addition, Nike's stock price closed at 62.8 US dollars, down 4.65 US dollars or 6.89%, JP Morgan Chase lowered its Nike target price from 111 US dollars to 75 US dollars.

McDonalds closed at $ 137.1, down $ 11.39 or 7.67%, and Deutsche Bank lowered its McDonald's target price from $ 199 to $ 171. Affected by the epidemic, McDonald's earlier announced that it would temporarily close all restaurants in the UK and Ireland, and there are other reports that McDonald's will suspend a $ 15 billion share repurchase program. In the past month, McDonald's stock price has fallen from a high of around $ 217 at the end of February to a minimum of $ 124, a drop of nearly 40%. The market value has also evaporated in the past few days, nearly $ 50 billion, from $ 160 billion to 1,000. Near the dollar.

Before the opening, the Fed announced that it would take a wide range of new measures to support US households, businesses and the overall economy, while expanding its debt purchase program, including the establishment of three new borrowing facilities to provide the market with $ 300 billion in debt through the purchase of debt.

The Federal Reserve will buy unlimited treasury bonds and real estate mortgage bonds to drive down interest rates and ensure market stability. On behalf of the Federal Reserve Board, the Bank of New York will buy US $ 75 billion in Treasury bonds and US $ 50 billion in mortgage-backed bonds at reasonable prices every day, and will take the lead in buying commercial mortgage-backed bonds from the market.

Since the economic crisis caused by the epidemic, the Fed has continued to “slug water”, continuously cut interest rates and repeatedly launched “easing”, not only reducing the benchmark interest rate to zero, but also announcing quantitative easing (QE) of up to 700 billion US dollars. The three major policy tools that were used during the 2008 financial crisis were the Commercial Paper Financing Facility (CPFF), Primary Dealer Credit Arrangement (PDCF), and Money Market Mutual Fund Liquidity Tool (MMLF).

[Continuous Update] The Fed's unlimited QE saves the market. The Dow still closes down by 600 points and falls below 19,000 points.

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