Wall Street bounces after worst day since 1987

After weeks of turmoil over the economic toll of the coronavirus U.S. stock indexes entered a bear market signaling an end to their 11-year winning streak

After weeks of turmoil over the economic toll of the coronavirus U.S. stock indexes entered a bear market signaling an end to their 11-year winning streak

The broader S&P 500, which professional investors watch more closely, is a single percentage point away from falling into its own bear market, which would end the longest bull market in Wall Street history. The suspension of professional sports games, canceled conventions and half-empty restaurants has raised fears - not about whether the longest USA economic expansion on record is ending - but about how deep a now presumed recession will be.

Traders on Thursday complained that monetary policy alone can not save the country from a pandemic that's hurting a slew of industries from the airlines to Broadway as people cancel their travel plans and large gathering become taboo.

"The coronavirus pandemic has taken the stock market into bear market territory and further declines are in the offing as the USA effectively hits the "Pause" button on the economy in an effort to curtail spread of the virus", according to Greg McBride, the chief financial analyst at Bankrate.

"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 S&P 500's rout has left it trading at under 16 times expected earnings, its lowest level since early 2019, according to Refinitiv Datastream.

The historic 11-year bull run in the S&P 500- which is a barometer for the health of retirement accounts and college savings plans - is now officially over as the index enters bear market territory defined by a loss of 20 percent off recent highs. Oil prices and the dollar rebounded, while 10-year Treasury yields recovered to almost 1%.

Reflecting that uncertainty, the Cboe Volatility Index, known as Wall Street's "fear gauge", jumped on Thursday in its biggest-ever one-day surge.

No fans, now no players: PGA Tour shuts down for a month
The Valero Open was to be the last tournament before the Masters, which is set to begin in April. He also stated that Tour players and everyone involved need to get tested.

"This is not an economic problem - there are ramifications of it that are economic - but the problem is this virus and the panic it is causing", said Tim Ghriskey, chief investment strategist at Inverness Counsel in NY.

"I don't know if I would call this a dead cat bounce, but I would certainly not call it a trend", said Katie Nixon, chief investment officer at Northern Trust Wealth Management. In just a few weeks, USA stocks have lost all the gains made during 2019, one of the best years for the market in decades.

A television broadcast showing U.S. President Donald Trump is pictured during a trading session at Frankfurt's stock exchange on March 12. The S&P 500 gained 41% in same number of days after Obama was elected president in 2008.

Major US stock market indices also plunged further after the World Health Organisation declared the coronavirus outbreak a global pandemic yesterday.

Expectations are running high for a second rate cut by the Federal Reserve this month, but analysts question whether that would address investors' underlying concerns. Bond funds have taken a hit and companies including Boeing are drawing on credit lines. That followed the Fed's surprise 50 basis rate cut last week, which failed to stabilize markets.

"We have to see coordinated fiscal and monetary policy, as well as government", said McClain. He said the stimulus plan should help cushion the financial effects on people and businesses. "This isn't Twitter. You have got to have details".

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.