At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a heavy decline. At the time of writing the benchmark index is down 5.3% to 5,247.5 points.
Here's what has been happening on the market today:
U.S Federal Reserve cuts interest rates to zero.
The S&P/ASX 200 index was expected to rise this morning but the surprise decision by the U.S. Federal Reserve to slash interest rates to zero has spooked global markets. Both S&P 500 and Dow Jones futures contracts crashed lower and hit limit down levels on the news. Dow Jones futures are pointing to a decline of over 1,000 points on Wall Street tonight.
Bank shares tumble.
The big four banks have started the week in a disappointing fashion. All four are trading notably lower after the U.S. Federal Reserve cut its interest rates. This has sparked concerns that the Reserve Bank may follow suit and cut rates down to zero in the near future as well. This would weigh heavily on net interest margins. The worst performer in the group today is the National Australia Bank Ltd (ASX: NAB) share price with a 7% decline.
Guidance changes.
A large number of companies have withdrawn or revised their earnings guidance this morning due to the uncertainty caused by the coronavirus outbreak. These include hearing solutions company Cochlear Limited (ASX: COH) and media and advertising company oOh!Media Ltd (ASX: OML) which have withdrawn their guidance altogether and annuities company Challenger Ltd (ASX: CGF) which has revised its guidance to a wider range.
Best and worst performers.
The best performer on the benchmark index on Monday has been the Coles Group Ltd (ASX: COL) share price with a gain of 2%. It is being seen as a winner from the outbreak due to the panic buying which is emptying its shelves. The worst performer on the index has been Cochlear share price with a 17.5% decline. It is closely followed by the Webjet Limited (ASX: WEB) share price with a 16% decline. Recently announced travel restrictions are weighing heavily on Webjet and its peers on Monday.
