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The
Dow Jones plummeted nearly 3,000 points (2,997.1, to be exact) at the close of
trading on Monday, finishing down 12.93 percent as markets continued to slide
despite tripping a circuit-breaker minutes after opening.
The
S&P 500 sank by a whopping 12 percent, while the Dow Jones Industrial
Average dropped 13 percent. The Dow has dropped over 30 percent since opening
at a high on February 12. This latest Dow drop is the worst since the infamous
Black Monday crash in 1987.
While
the Federal Reserve has cut rates toward zero in an effort to boost the
economy, the continuing closure of schools, restaurants, bars, movie theaters,
etc. across the country is affecting the market dramatically, and with no end
in sight to the coronavirus panic, it’s an unsure market for investors.
Confidence
in the markets was not helped by a Monday afternoon press conference in which
President Donald Trump said the federal government could be responding to the
coronavirus until “July or August,” possibly longer.
Precious
metals have also been sent into free fall, with gold dropping by 1.3 percent to
just over $1,500 an ounce. Silver, platinum, and palladium have seen even steeper
declines, each falling by over 12 percent on Monday.
Brent
and WTI crude tumbled by 9 and 11.3 percent respectively, taking a toll on
petrol giants including Chevron, BP, Royal Dutch Shell, and Suncor Energy, each
of which saw more than a 15-percent decline in stock price. Apache was among
the worst affected, down by over 30 percent.
Trading
is halted for 15 minutes as traders work on the floor at the opening bell of
the Dow Industrial Average at the New York Stock Exchange on March 12, 2020 in
New York. (AFP photo)
The
escalating corona virus emergency Thursday sent stocks to their worst losses
since the Black Monday crash of 1987, extending a sell-off that has now wiped
out most of Wall Street's big run-up since President Donald Trump's election.
The
S&P 500 plummeted 9.5%, for a total drop of 26.7% from its all-time high,
set just last month. That puts it way past the 20% threshold to make this a
bear market, snapping an unprecedented, nearly 11-year bull-market run. The Dow
Jones Industrial Average sank 10% for its worst day since a nearly 23% drop on
Oct. 19, 1987.
European
markets lost 12% in one of their worst days ever, even after the European
Central Bank pledged to buy more bonds and offer more help for the economy.
The
heavy losses came amid a cascade of cancellations and shutdowns across the
globe - including Trump's suspension of most travel to the US from Europe - and
rising worries that the White House and other authorities around the world
can't or won't counter the economic damage from the coronavirus pandemic any
time soon.
"The
news just continues to get worse, and the travel ban puts an exclamation point
on the weakness we're going to see in global GDP and, in turn, the US,"
said Liz Ann Sonders, chief investment strategist at Charles Schwab.
"We're starting to get a sense of how dire the impact on the economy is
going to be. Each day the news doesn't get better, it gets worse. It's now has
hit Main Street to a more significant degree."
Stocks
fell so fast on Wall Street at the opening bell that they triggered an
automatic, 15-minute trading halt for the second time this week. The so-called
circuit breakers were first adopted after the 1987 crash, and until this week
hadn't been tripped since 1997.
The
Dow briefly turned upward and halved its losses at one point in the afternoon
after the Federal Reserve announced it would step in to ease "highly
unusual disruptions" in the Treasury market. But the burst of momentum
quickly faded.
Trump
often points proudly to the big rise on Wall Street under his administration
and warned a crowd at a rally last August that "whether you love me or
hate, you gotta vote for me," or else your 401(k) will go "down the
tubes."
Just
last month, the Dow was boasting a nearly 50% gain since Trump took the oath of
office on Jan. 20, 2017. By Thursday's close, the Dow was clinging to a 6.9%
gain, though it was still up nearly 16% since just before Trump's election in
November 2016.
On
Wednesday, the Dow finished the day down more than 20% from its all-time high,
set just last month, officially entering what is known as a bear market for the
first time in over a decade.
The
combined health crisis and retreat on Wall Street heightened fears of a
recession.
"This
is bad. The worst and fastest stock market correction in our career,"
Chris Rupkey, chief financial economist at MUFG Union, said in a research note
overnight. "The economy is doomed to recession if the country stops
working and takes the next 30 days off. The stock market knows it."
The
coronavirus has infected around 128,000 people worldwide and killed over 4,700.
The death toll in the US climbed to 39, with over 1,300 infections. For most
people, the virus causes only mild or moderate symptoms, such as fever and
cough. For some, especially older adults and people with existing health
problems, it can cause more severe illnesses, including pneumonia. The vast
majority of people recover from the virus in a matter of weeks.
In
a somber prime-time address Wednesday night from the White House, Trump
announced the new travel ban as well as measures to extend loans, payroll tax
cuts and other financial relief to individuals and businesses hurt by the
crisis.
But
the travel restrictions represented another heavy blow to the already battered
airline and travel industries, and the other measures did not impress Wall
Street.
"What
markets are waiting for are efforts to contain the virus in a very aggressive
way, ways we've seen in other countries," said Nela Richardson, investment
strategist at Edward Jones. "Short of that, nibbling around the edges,
maybe doing something that can help a firm with a very short-term impact or
help an employee, doesn't hurt, but it's not the bull's-eye, and it's not as
targeted as the markets would like to see."
Michael
McCarthy of CMC Markets said: "The market judgment on that announcement is
that it's too little, too late."
The
damage was worldwide and eye-popping. Among the big moves:
-
Travel stocks again were among the hardest hit. Norwegian Cruise Line and Royal
Caribbean Cruises both lost roughly a quarter of their value. Another drop for
United Airlines put its loss for the year at more than 50%.
-
Oil continued its brutal week, with benchmark US at $31 per barrel.
-
In Asia, stocks in Thailand and the Philippines fell so fast that trading was
temporarily halted. Japan's Nikkei 225 sank 4.4% to its lowest close in four
years, and South Korea's market lost 3.9%.
Perhaps
more alarming were complaints in recent days by investors that trading in the
Treasury market wasn't working well. For reasons that weren't immediately
clear, traders said they were seeing surprisingly large gaps in prices being
offered by buyers and sellers. That threatened to cause the market to seize up.
In
a surprise move, the Fed said it would pump in at least $1.5 trillion to help
calm the market and facilitate trading.
After
earlier thinking that the virus could remain mostly in China and that any dip
in the economy would be followed by a quick rebound, investors are seeing the
damage and disruptions mount, with Italy locking itself down, the NBA
suspending games and authorities in the US and beyond banning large gatherings
and closing schools.
Global
market freefall CONTINUES as European bourses open to bearish trading
Stock
markets in Europe are opening to a downward trend, following a plunge in Asia.
The pan-European STOXX 600 fell 6.1 right after stock exchanges opened in
London, Paris, and Frankfurt.
Germany’s
DAX index fell 7.8 percent after the Frankfurt Stock Exchange opened trading on
Monday, and is projected to have its biggest daily drop in 18 years.
London’s
commodity-heavy FTSE 100 was down more than eight percent, with stocks of oil
companies among those hit hardest by the collapse.
France’s
CAC 40 dove 7.7 percent, with oil giant Total and metal maker ArcelorMittal
plummeting over 15 percent.
Borsa
Italiana’s main index FTSE MIB fell by 10.5 percent, apparently reflecting
traders’ fears over the toll the rampaging Covid-19 virus epidemic could take
on the Italian economy. Among European nations, Italy has been hit hardest by
the infection.
Earlier
on Monday, Asian equities collapsed amid concerns over an economic slowdown due
to the spread of the coronavirus and a 31-percent plunge in the price of oil,
unseen since the 1991 Gulf War.
UK Prime Minister David Cameron has warned taxpayers that public sector cuts will be permanent.
In a question and answer session with an audience in Birmingham, Cameron dashed hopes of restoring public sector funding levels once the budget deficit has been addressed.
The prime minister told the audience that cuts imposed by his government should be sustainable.
"We are going to have to change the way we work," he said. "How can we do things differently and better to give value for money?"
"Every family knows that as a business you cannot go on living beyond your means indefinitely. You have to make sure that revenue and spending come into balance. At the end of this parliament we will be paying £17bn in interest just on the interest on debt, (which) is more than we spend on schools."
"There is a moral responsibility," he added. "I don't think we should be racking up our debts for our children to pay. We need to be fair to future generations, and this generation should deal with its own problems."
On a question about social housing provision, the prime minister said that he believes council houses should no longer be granted "for life".
He noted that the tenants should be given fixed-term deals in the future so they can be moved on if their circumstances change.
The prime minister, however, conceded that attempts to reform the system would cause a "big argument".
Britain's Financial Services Authority (FSA) has asked the country's largest banks to model a number of disaster scenarios in response to Europe's deepening financial crisis.
According to analysts, banks in Britain have a total exposure of more than £100 billion to Greece, Portugal and Spain alone. In one scenario, British banks have been asked to model the possibility of Greece defaulting on its loans.
The request is part of a "risk map" by senior officials at FSA to examine potential quandary that British banks may encounter as a result of the eurozone country's growing economic troubles.
Even after an EU rescue package worth €750 billion (£620 billion) was set up to help bailout EU countries on the verge of bankruptcy, European markets continue to remain on edge.
New concerns have risen over Hungary's finances as their new government recently announced that its predecessors falsified data on the country's finances. Moreover, the euro has slid below $1.20 for the first time since March 2006, with analysts expecting it to hit the same level as the dollar.
British Chancellor George Osborne is expected to announce a new tax on British banks as well as cuts to welfare programs and public sector pay in his emergency budget on June 22, which has been backed by the G20 groups of leading nations.
Prime Minister David Cameron has signaled that Britain faces "years of pain ahead," as the government tries to cope with its own financial crisis.
South Africa's Closing Argument Against Israel for Genocide at the ICJ
Freedom
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Please feel free to share anything that resonates with you or that you feel would benefit those in your circles. Comments are always welcome. ~Stewart Brennan~
I'm not in phase with what mainstream mediums have to offer, nor do I like being lied to. So I decided to build my own World where creativity, music, and truth prevail. Therefore I’m a photographer, Writer, Video Producer, News Reporter, Music Promoter, Radio DJ, Poet, Activist, Critical Thinker, and Problem Solver. Be sure to visit all my websites linked below for more of my world.
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