Oil crash sparks “Black Monday” meltdown on global coronavirus fears hit markets

AFP reports world oil prices crashed Monday, fuelling a vicious selloff on stock markets which were already buckling under intense pressure over the spreading coronavirus outbreak.

Stocks tanked as the global oil market nosedived 30 percent at one stage after top exporter Saudi Arabia slashed the prices it charges customers following a bust-up with Russia over crude production cuts.

The dollar slid versus the yen, seen as a safe haven investment.

The New York markets tumbled at the opening with the DJIA immediately down nearly six percent, playing catch up with Europe where London, Paris and Frankfurt were all off more than eight percent.

Per Marketwatch, “The coronavirus presents investors with an unprecedented global problem. Investors are uncertain about the nature of the virus, its potential economic impact and the policy response. The oil shock has only added to this confusion and uncertainty,” said Paul O’Connor, head of the multi-asset team at Janus Henderson Investors, in a note.

“One thing we do know, however, is that markets are now in panic mode,” he said.

CNBC’s Jim Cramer tweeted:

The collapse in yields and oil is signalling an imminent recession…I think we need to parse everything and remember that while most stocks aren’t buyable, they will get to be that soon enough at this pace..

Cramer added:

The collapse in oil and the collapse in yields are both unprecedented and exceed the chaos of 2007-2009 today. The algorithms operated all night as if trillions of dollars were trading……Uncharted waters

It’s the speed… The speed and the thinness. That you could have such a monumental move in six hours is truly astounding. The average oil stock could be down 25% at the opening. The average S&P stock could be down 10%. Gold remains the only bull market besides utilities, drugs