“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.
“U.S. stocks careened lower Monday, pushing major indexes closer to bear-market territory as a price war for oil and coronavirus fallout frightened investors,” the Wall Street Journal reports.
“The selling was heavy across markets and geographies, with investors seeking shelter in government bonds and sending Treasury yields to new lows. U.S. stocks fell hard enough after the open to trigger a 15-minute trading halt.”
“As of 4 p.m. Eastern time, the Dow sank 2,014 points, or 7.8%, its sharpest daily decline since 2008.”
“Pick just about any market — stocks, bonds, oil — and it’s sending a signal that investors around the world think there’s a high probability of a recession,” the Washington Post reports.
“J.P. Morgan sent around a note to clients late last week saying markets were indicating a 90 percent chance of a recession, a term that generally means six straight months of economic contraction. The picture looks worse now, especially in the bond market. Last week, Wall Street panicked when the yield on a marquee government bond — the U.S. 10-year Treasury — fell below 1 percent. That had never happened before. Now that yield is below 0.5 percent, a jaw-dropping situation that didn’t even occur during the Great Recession.”
Bloomberg: “Traders are pricing in about 80 basis points of cuts in March, and 100 basis points by July, which would drag borrowing costs down to zero.”
“In my opinion, it’s a great time to buy stocks or into your 401K. I would be all in… let’s see if I’m right…”
— Eric Trump, tweeting on February 28.
The S&P 500 fell 7% in the early minutes of trading in New York, triggering an automatic halt known as a circuit breaker.
The Dow Jones Industrial Average tumbled 7.3%, or 1,884 points.
“Oil prices tumbled by roughly 20% on the prospect of a Saudi-led energy glut, hammering global shares and fueling a fresh surge in demand for Treasurys and other safe assets. U.S. stock futures fell by the maximum 5% allowed in a single session,” the Wall Street Journal reports.
“Investors were responding to Saudi Arabia’s decision to cut most of its oil prices and boost output, despite existing threats to demand from the coronavirus epidemic. Trading in futures tied to the S&P 500 was limited for the first time since shortly after President Donald Trump won the U.S. election in 2016.”
“U.S. government bonds, which have already rallied to unprecedented highs, extended gains. The yield on the benchmark 10-year U.S. Treasury note fell 0.239 percentage points to 0.529% and the equivalent 30-year yield declined to 1.028%.”
Bloomberg: “The entire Treasury yield curve tumbled, trading below 1% for the first time in history as investors grappled with the worst global crisis in more than a decade. A drop to 0% is now priced in swap markets.”
“The 10-year US Treasury yield dropped below 1 per cent for the first time on Tuesday, after the Federal Reserve delivered its first emergency rate cut since the financial crisis in order to stave off the long-term economic impact from the spread of the coronavirus,” the Financial Times reports.
Bloomberg: “It is hard to exaggerate the historic significance of Tuesday’s events in the bond market… According to historical work by Robert Shiller, the Nobel laureate economist at Yale University who has reconstructed the 10-year interest rates available in the U.S. back to 1871, it has never before dropped this low. Many momentous events have shaken the U.S. since Ulysses S. Grant’s presidency, but none of them were sufficient to drive long-term money down to such cheap levels.”
“Finance ministers from the richest nations and their central bankers held a rare conference call early Tuesday. They pledged to do whatever it takes to support a global economy under acute threat from the coronavirus,” Bloomberg reports.
“When they hung up the phone, only a single institution sprang into action. The U.S. Federal Reserve cut its benchmark interest rate by a half-point — the biggest reduction, and the first one outside of scheduled meetings, since the crisis year of 2008.”
“The Federal Reserve cut its benchmark rate by a half percentage point on Tuesday morning, delivering a booster shot to stem potential economic disruptions from the spreading coronavirus epidemic,” the Wall Street Journal reports.
“Tuesday’s cut, which lowered the federal-funds rate to a range between 1% and 1.25%, is the first to occur in between a scheduled policy meeting since the 2008 financial crisis.”
“The implied yield on U.S. 10-Year Treasury futures traded below 1% for the first time, as investors grew increasingly unnerved by the spread of coronavirus,” Reuters reports.
“Treasury futures jumped at the open of trading on Sunday night as investors took little solace from weekend comments by U.S. officials that aimed to soothe panic about a pandemic.”
“Asian stock markets plunged further Friday on spreading virus fears, deepening a global rout after Wall Street endured its biggest one-day drop in nine years,” the AP reports.
U.S. stock index futures fell as President Trump’s speech failed to assuage investors’ concerns of the novel coronavirus derailing global growth, Bloomberg reports.
“March contracts on the S&P 500 Index were down 0.4% as of 9:19 a.m. in Tokyo, after slumping as much as 1%, as the president held a press conference to update the country on the administration’s response to the growing crisis. The underlying index is mired in a five-day losing streak that wiped out more than $2 trillion in value from American equities.”
Washington Post: “The president was contradicted almost in real time by some of the government experts who flanked him as he stood in the White House press briefing room.”
Associated Press: “Stocks are opening sharply lower on Wall Street, pushing the Dow Jones Industrial Average down more than 700 points, as virus cases spread beyond China, threatening to disrupt the global economy. The early plunge in U.S. trading erased the Dow’s gains for the year.”
“Markets in Europe and Asia had even bigger losses as infections spread in Italy, Iran and South Korea.”
“I think I might find it harder to vote for Bernie than for Trump. There’s a long time between now and then. The Democrats would be working very hard to find someone who is as divisive as Trump. But with Bernie they would have succeeded.”
— Former Goldman Sachs CEO Lloyd Blankfein, quoted by the Financial Times.
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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