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Global equities slid further and safe-haven assets rose on Monday after a massive array of new programs from the U.S. Federal Reserve underscored the “severe” disruptions the coronavirus pandemic poses to a fast-weakening world economy.

Traditional safe-havens such as gold, U.S. Treasury and German debt rose while industrial metals fell as the outlook for global growth grew dimmer.

London aluminum prices slumped to their lowest since June 2016 while Shanghai copper fell to the weakest in nearly 11 years on fears that the lockdowns among a growing number of countries will usher in a severe recession.

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Oil prices extended their decline as the coronavirus epidemic crushes demand worldwide.

The Fed for the first time will back purchases of corporate bonds, backstop direct loans to companies and “soon” will roll out a program to get credit to small and medium-sized business as it intervenes beyond the financial markets.

“While great uncertainty remains, it has become clear that our economy will face severe disruptions,” the Fed said in a statement.

While S&P 500 futures rose sharply after the announcement, U.S. stocks mostly traded in the red from the opening bell, dropping almost 5% at one point.

“It’s their bazooka moment. It’s their ‘We’ll do whatever it takes’ moment,” said Russell Price, chief economist at Ameriprise Financial Services in Troy, Michigan, said about the U.S. central bank’s latest move.

“But quite frankly the market is just in a waiting period right now until the virus runs its course and some of the therapies and other treatments are able to improve outcomes.”

Morgan Stanley analysts said they expect global growth to dip close to global financial crisis lows and U.S. growth to drop to a 74-year low in 2020. Goldman Sachs sent a similar warning.

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Canada’s main stock index fell on Monday due to heightened fears of a global recession as the fast-spreading coronavirus forced lockdowns across several countries.

The Toronto Stock Exchange’s S&P/TSX Composite index was unofficially down 623.32 points, or 5.26%, at 11,228.49.

The Canadian death toll from the virus outbreak jumped by more than 50% on Sunday, and impatient officials threatened to punish people refusing to take precautions to fight the spread of the highly contagious illness.

Nine of the index’s 11 major sectors fell.

The energy sector dropped 3.8% as crude prices fell.

The financials sector slipped 7.9%. The industrials sector fell 3.7%.

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The materials sector, which includes precious and base metals miners and fertilizer companies, added 5.4% as gold prices rose.

Based on the latest available data, the Dow Jones Industrial Average fell 575.58 points, or 3%, to 18,598.4, the S&P 500 lost 65.55 points, or 2.84%, to 2,239.37 and the Nasdaq Composite dropped 16.37 points, or 0.24%, to 6,863.14.

The Dow at one point traded below its closing level on Nov. 8, 2016, effectively erasing all the gains since the election of Donald Trump as U.S. president.

The pan-European STOXX 600 index lost 4.30% and MSCI’s gauge of stocks across the globe shed 3.81%.

Emerging market stocks lost 5.61%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 5.75% lower, while Japan’s Nikkei rose 2.02%.

Globally, analysts are dreading data on weekly U.S. jobless claims due on Thursday amid forecasts they could balloon by 750,000 and possibly by more than a million.

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The Fed’s moves put pressure on the U.S. dollar, which has risen sharply as the panic-selling drives investors toward the liquidity of the greenback and to dollar-denominated assets.

The buying continued in U.S. Treasuries, for example, and yields fell sharply.

“At the end of the day, the Fed’s injections announced Monday are designed to backstop liquidity in market functioning but cannot avert the economic calamity that’s already underway,” said Jon Hill, U.S. rates strategist at BMO Capital Markets.

“It really is just trying to make sure markets work and companies and municipalities can access markets when needed, but that doesn’t mean layoffs aren’t coming, it doesn’t mean that a recession is not coming. And if you’re the equity market, it’s really hard to rally even on that news.”

Benchmark 10-year Treasury notes last rose 1-29/32 in price to yield 0.7452%, from 0.938% late on Friday. The 30-year bond last rose 4-30/32 in price to yield 1.3719%, from 1.562%.

The dollar index was little changed after falling as much as 0.84% after the Fed’s announcements. The dollar fell 0.127%, with the euro up 0.45% to $1.0742.

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The Japanese yen weakened 0.52% versus the greenback at 111.34 per dollar, while Sterling was last trading at $1.1529, down 0.96% on the day.

U.S. gold futures settled 5.5% higher at $1,567.60 an ounce.

Investors are waiting on the U.S. government to pass stimulus to support the economy.

“I think the one thing we really need to see is more fiscal ammunition coming to the fore,” said Mazen Issa, senior currency strategist at TD Securities in New York. “You’ve got to think about those that are asked to be socially distant and stay home from work and not earn a paycheck, and they’re taking their time to make them whole. They need to speed it up.”

Oil prices inched higher on Monday, while U.S. gasoline prices plunged more than 30% to a record low as global restrictions on travel to slow the spread of coronavirus destroyed demand for fuel.

Brent crude futures ended the session up 5 cents at $27.03 a barrel while West Texas Intermediate (WTI) crude futures for May delivery rose 73 cents, or 3.2%, to $23.36 a barrel. Both benchmarks traded in negative territory until late in the session.

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Gasoline futures in the United States, the world’s top consumer of the motor fuel, tumbled 32% to settle at about 41.18 cents a gallon, their lowest on record. That was the biggest daily percentage drop ever, and also sent the profit margin to produce gasoline into negative territory.

“There’s nobody driving, there’s no business, there’s nobody that needs gasoline, and not only that, it could get a lot worse,” said Bob Yawger, director of energy futures at Mizuho in New York.


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