The ASX 200 (ASX: XJO) is down 3.3% right now. Added to yesterday’s decline, it’s the worst two days in many weeks.
Why the ASX 200 is getting crunched
The ASX 200 fell 3% yesterday and now it’s down by a further 3.3%. That’s a pretty big drop over just two days.
It seems that there are two catalysts to the current selloff. One reason is that there seems to be a second wave of COVID-19 cases in the US. Or, the first wave is now spreading to other regions of the US beyond New York. Places like Texas, Arizona and the southern US states are seeing growing COVID-19 numbers.
The other main thing to be aware of is that the US Federal Reserve boss Jerome Powell said this week that the US economy will take longer to recover than some people are expecting. Unemployment could remain high for the rest of the year. Some businesses and jobs may simply not come back.
What happens in the US doesn’t necessarily have a huge effect on ASX 200 earnings, but it can really hurt sentiment about the share prices.
Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned.