Markets won’t bottom until coronavirus resolves: Cornerstone Macro chief investment officer | https://t.co/p15qftFxyK
— @natsnews (@natsallnews) April 1, 2020
Coronavirus fears intensify for investors as the second quarter begins.
For stock investors the second quarter kicked off on a down note as U.S. cases of the coronavirus topped 200,000.
|I:DJI||DOW JONES AVERAGES||20943.51||-973.65||-4.44%|
|I:COMP||NASDAQ COMPOSITE INDEX||7331.815546||-368.28||-4.78%|
The Dow Jones Industrial Average plunged over 973 points or 4 percent, while the S&P 500 and Nasdaq Composite fell 4.4 percent.
Boston Federal Reserve President Eric Rosengren believes the coronavirus is a ‘Black Swan’ event that will result in two-quarters of negative GDP growth coupled with a 10 percent unemployment rate for several months, a far cry from the current rate of 3.5 percent.
The selling follows the worst first quarter in years after President Trump warned the number of COVID-19 infections is set to surge in the coming weeks.
The blue-chip Dow plummeted 23 percent during the first three months of the year, its worst quarter since 1987. The S&P 500 fell 20 percent and the Nasdaq Composite shed 14 percent, their worst quarterly performances since the fourth quarters of 2008 and 2018, respectively.
Trump delivered a sobering COVID-19 assessment on Tuesday evening, warning the country is in for a “very painful two weeks” and that the number of deaths in America due to the virus could surge as high as 240,000.
Looking at stocks, oil companies got some attention on word the executives of the major energy companies will meet with President Trump on Friday to discuss the collapse in crude prices which fell 0.83 percent to $20.31.
|XOM||EXXON MOBIL CORPORATION||37.26||-0.71||-1.87%|
|USO||UNITED STATES OIL FUND L.P.||4.32||+0.11||+2.61%|
Airlines were also in focus after data showed passenger traffic was down 86 percent in two weeks. Cruise operators were also lower amid renewed fears over the health of the industry.
|AAL||AMERICAN AIRLINES GROUP INC.||10.66||-1.52||-12.51%|
|UAL||UNITED AIRLINES HLDG.||25.68||-5.87||-18.61%|
|DAL||DELTA AIR LINES INC.||23.98||-4.54||-15.93%|
|RCL||ROYAL CARIBBEAN CRUISES||25.92||-6.25||-19.43%|
Xerox ended its $35 billion attempted hostile takeover of HP, saying the COVID-19 pandemic has created conditions that hinder continuing its pursuit of the company.
|HP||HELMERICH & PAYNE INC||14.30||-1.34||-8.59%|
Macy’s was removed from the S&P 500 as its market capitalization fell to $1.5 billion, the smallest in the index. The stock will be placed in the S&P SmallCap 600 starting on April 6.
|JPM||JP MORGAN CHASE & CO.||84.26||-5.77||-6.41%|
|BAC||BANK OF AMERICA CORP.||19.73||-1.50||-7.07%|
|WFC||WELLS FARGO & COMPANY||26.55||-2.15||-7.49%|
Banks stocks were pressured as U.S. Treasurys rallied sharply and the yield curve flattened. The yield on the 10-year note was down 10.3 basis points at 0.596 percent.
Commodities were mixed, with West Texas Intermediate crude oil for May delivery down 0.8 percent at $20.32 a barrel after weekly inventory data showed a much larger than expected build and gold for June delivery up 0.51 percent near $1,588 an ounce.
In Europe, markets were lower across the board, with France’s CAC down 4.17 percent, pacing the decline. Germany’s DAX and Britain’s FTSE were off 4 percent and 3.75 percent, respectively.
Asian markets fell as Hong Kong’s Hang Seng lost 2.19 percent and China’s Shanghai Composite slid 0.57 percent. Japan’s Nikkei remained closed for a holiday.