“The New York Stock Exchange said Wednesday it will temporarily close its trading floor and move fully to electronic trading after traders tested positive for coronavirus infection,” CNBC reports.
“All-electronic trading will begin on March 23 at the open.”
“Financial markets continued to spasm Wednesday, with U.S. stocks plunging toward levels that pause trading, as the economic fallout from the pandemic outpaces the massive response from governments and central banks,” Bloomberg reports.
“The S&P 500 fell more than 6% and wiped out all the gains logged since Donald Trump’s inauguration.”
Wall Street Journal: “Investors are even shunning assets that are normally considered the safest, including long-term government bonds and gold. That rarely happens when riskier assets like stocks are also falling.”
Wall Street Journal: “U.S. stock futures fell by the maximum allowed, and international indexes tumbled, as the financial turmoil sparked by the novel coronavirus continued to roil markets.”
“The Federal Reserve announced Tuesday that it will try to keep credit flowing to households and businesses by buying up commercial paper, short term promissory notes companies use to fund themselves,” the New York Times reports.
“The program, enacted using the Fed’s emergency lending powers, pulls a page from the central bank’s financial crisis playbook. Putting it into action required the signoff of Treasury Secretary Steven Mnuchin and Treasury will provide $10 billion of credit protection to the Fed, using Treasury’s Exchange Stabilization Fund.”
Wall Street Journal: “The Fed can’t lend directly to households and businesses, but it can invoke emergency powers to establish lending facilities that can, in turn, extend credit.”
“U.S. stocks dropped sharply Monday even after the Federal Reserve slashed its benchmark interest rate to near zero, reflecting investors’ concerns that the emergency measures may not be enough to ward off a coronavirus-induced recession,” the Wall Street Journal reports.
“The Dow Jones Industrial Average slid 12.9%, or 2,999 points, as of the 4 p.m. Eastern time close of trading, dropping further during an afternoon news conference by President Trump.”
“It makes me very happy. I think that people in the market should be very thrilled.”
— President Trump, quoted by Barrons after the Federal Reserve cut interest rates to zero yesterday.
Stock trading was halted this morning just seconds after the market opening.
“The Federal Reserve’s drastic easing measures Sunday are doing little to stem the market bleeding, judging by some of the world’s largest exchange-traded funds,” Bloomberg reports.
“The SPDR S&P 500 ETF Trust, a $248 billion product that tracks the American equity benchmark, slumped 9.1% as of 5:08 a.m. New York time in pre-market trading.”
Federal Reserve Chairman Jerome Powell said Sunday that it’s unlikely that the central bank will entertain negative interest rates as the next step to help the economy during the coronavirus scare, CNBC reports.
After announcing a cut of short term interest rates to near zero, stock market futures did not react well and were halted after falling nearly 5%.
“The Federal Reserve slashed its benchmark interest rate to near zero on Sunday and said it would buy $700 billion in Treasury and mortgage-backed securities in an aggressive bid to prevent market disruptions from aggravating what is likely to be a severe slowdown from the coronavirus pandemic,” the Wall Street Journal reports.
New York Times: “Besides cutting its key interest rate by a full percentage point, returning it to a range of 0 to 0.25 percent, the Fed said that it would increase its holdings of Treasury securities by at least $500 billion and its holdings of government mortgage-backed securities by at least $200 billion ‘over coming months.'”
“President Trump said on Saturday that he had the power to remove or demote Jerome H. Powell, the Federal Reserve chair, renewing a long-running threat against the central bank’s leader at a time when it could further roil volatile markets,” the New York Times reports.
“While it was a familiar threat from a president who has continually beaten up on Mr. Powell, it was made in the midst of growing concern that the spread of the coronavirus could tip the United States into a recession.”
“The mere hint that Mr. Trump could fire Mr. Powell, or demote him to a Fed governor, risks further destabilizing markets by worrying investors, who are already fretting over the economic fallout from shut-down businesses, quarantined workers and curtailed activity.”
Bloomberg: “Here’s something to ponder as you consider Friday’s roaring rebound in equities. To undo the worst stock market crash since 1987, it took the biggest rally since October 2008.”
“That’s right: The last time shares surged this much, it came smack in the middle of the worst month in 33 years, one the S&P 500 finished down 17%. So while Wall Street was naturally thrilled to finish its most volatile stretch since the financial crisis on an up note, nobody was ready to call the bottom.”
“Another thought, to leaven the ecstasy. Last time stocks rose 9% in one session then fell 9% in the next, it was 1931. Also a less-than-auspicious year.”
Ambrose Evans-Pritchard: “Global asset markets are priced for a light recession. They are not priced for a deep downturn, let alone a series of seismic aftershocks that expose the fragility of an international system with record debt ratios near 322 percent of GDP ($257 trillion). The United Nations’ economics arm said a toxic mix of asset price deflation and debt distress could now set off a ‘vicious downward spiral’ if world leaders fail to stem the contagion.”
“This was the most expensive speech in history.”
— Wall Street strategist Luca Paolini, quoted by the Financial Times, after the equity markets tanked because President Trump’s Oval Office address.
“U.S. stock futures and European equities recovered some ground Friday on the heels of Wall Street’s worst day in more than three decades,” the Wall Street Journal reports.
“The selloff in U.S. stocks gathered pace Thursday with the Dow Jones Industrial Average falling nearly 10% in its worst day since the 1987 crash, while the S&P 500 and Nasdaq joined it in bear-market territory,” the Wall Street Journal reports.
“The furious falls in share prices on rising fears of a global slowdown due to the rapid spread of coronavirus occurred despite a $1.5 trillion intervention in short-term funding markets by the Federal Reserve.”
“U.S. stocks recovered some of their steep losses on Thursday after the Federal Reserve announced extraordinary funding actions to ease strained capital markets in the wake of the coronavirus sell-off,” CNBC reports.
“The selling looks far from over as futures trading on all three major U.S. indexes had to be halted after falling by 5% ahead of the market open today,” Axios reports.
The stock markets open at 9:30 a.m. ET. Here are links to track the major market indices:
U.S. stock market futures fell more than 1,000 points in the hours after President Trump’s address to the nation on the global coronavirus pandemic.
Taegan Goddard is the founder of Political Wire, one of the earliest and most influential political web sites. He also runs Political Job Hunt, Electoral Vote Map and the Political Dictionary.
Goddard spent more than a decade as managing director and chief operating officer of a prominent investment firm in New York City. Previously, he was a policy adviser to a U.S. Senator and Governor.
Goddard is also co-author of You Won - Now What? (Scribner, 1998), a political management book hailed by prominent journalists and politicians from both parties. In addition, Goddard's essays on politics and public policy have appeared in dozens of newspapers across the country.
Goddard earned degrees from Vassar College and Harvard University. He lives in New York with his wife and three sons.
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