U.S. stock futures tumbled by about 4% on Wednesday evening, indicating that Wall Street was poised to extend its grim sell-off, after President Donald Trump announced new plans intended to contain the human toll and economic impact of the worsening coronavirus outbreak that has whipsawed global markets.
In a televised address, Trump said he was planning to suspend travel from certain areas of Europe to the U.S. for the next 30 days. He also announced plans for $50 billion of low interest loans to affected businesses and suggested a delay in the April 15 tax filing deadline.
“President Trump’s address to the nation was symptomatic of the lack of policy coordination in the face of a global coronavirus pandemic,” Oxford Economics’ Gregory Daco said. “Markets reacted negatively to what was perceived as a solemn but confused speech that placed blame on other nations, omitted to focus on immediate actions to relieve the most affected individuals, and lacked in concrete fiscal and health measures to address the economic and financial impact of the virus.”
U.S. equity futures tumbled and sent the S&P 500 (ES=F), Dow (YM=F) and Nasdaq (NQ=F) deeper into the red. As of 2:45 a.m. ET on Thursday, Dow futures were down around 1,000 points or 4.3% — suggesting major benchmarks were in for yet another day of bloodletting at Thursday’s opening bell.
The selloff suggests investors were hoping for much more.
"2 hours [before the speech], with Australia launching financial crisis level plans, I had brief visions of country by country launching what looked like coordinated fiscal stimulus,” Academy Securities’ Peter Tchir said. “I'm disappointed with what we got...”
Some analysts were a bit more alarmed.
“The U.S. limiting entry to foreign nationals from Europe has the potential to cause another world depression again even if it is for reasons that seek to stop the spread of the coronavirus,” MUFG economist Chris Rupkey said. “Business activity is going to hit the brakes around the world and stock markets around the world are in freefall as the spread of this deadly pandemic virus has the potential to slow the global economy to a crawl.”
Other proposals under consideration by the Trump administration included a payroll tax cut and expanded worker protections, to help counteract any economic fall-out from the ongoing coronavirus outbreak.
While some of these ideas have been met with resistance in the House, Eurasia Group’s Todd Marino wrote late Wednesday that “the snowballing impact of the coronavirus in coming weeks, combined with a White House push, will likely result in bipartisan alignment—rare in an election year—on [a] big-bang stimulus.”
The World Health Organization officially designated the coronavirus outbreak a pandemic on Wednesday, as the virus spread across more than 100 countries and infected well over 100,000 individuals. The Dow extended its losses during the U.S. trading session on Tuesday following the announcement.
Weeks of panic-driven selling has dragged blue-chip stocks into bear market territory at a breathtaking pace, of less than a month from peak to trough. The Dow shed 1,464.94 points during the session, or 5.9%, sending it more than 20% below its recent high from February and into a bear market.
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https://finance.yahoo.com/news/stock-market-news-live-march-12-013620137.html
2020-03-12 07:02:00Z
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