The stomach-turning ride on global financial markets took a dramatic turn yesterday, with U.S. Equity Markets plunging the most since 1987 after President Donald Trump warned the economic disruption from the virus could last into summer. The S&P 500 sank 12%, extending losses as Trump said the economy could fall into a recession. Equities opened sharply lower after central bank stimulus around the world failed to mollify investors worried about the damage the coronavirus is inflicting on economies. The negative superlatives for American stocks are piling up. The S&P wiped out its gain in 2019 and is now down almost 30% from its all-time high. The Dow Jones Industrial Average lost almost 13%, falling 3,000 points to close at a two-year low. The Russell 2000 had its worst day on record, losing more than 14%. While the Fed cut rates toward zero and stepped up bond buying, investors continued to clamor for a massive spending package to offset the pain from closures of schools, restaurants, cinemas and sporting events. Companies around the world have scaled back activity to accommodate government demands to limit social interaction.
Here are some of Monday’s key moves across major assets:
- All 11 groups in the S&P 500 fell, with eight of them down at least 10%.
- The Dow Jones Industrial Average’s tumble from its record reached 30%.
- Brent crude dipped below $30 a barrel for the first time since 2016.
- Treasury yields retreated across the curve with moves most pronounced on the short end.
- Shares tumbled in Asia and Europe, where the continent is now reportingmore new virus cases each day than China did at its peak as more countries lock down.
- The Yen surged, the Swiss franc rallied and the Dollar fluctuated.
- Gold failed again to capitalize on the rush to havens and reversed an earlier gain to tumble.
- Bonds declined across most of Europe, where a measure of market stress hit levels not seen since the 2011-2012 Euro crisis.
However, this morning U.S. equity futures rallied by the most allowed and European stocks jumped as investors caught their breath after the biggest plunge on Wall Street since 1987. Treasuries fell alongside the yen and gold. S&P 500 futures reached their limit-up after the index plunged 12% Monday, erasing its gain for all of 2019. The Stoxx Europe 600 Index jumped after its lowest close in seven years. Asia saw a volatile session, with Japan’s equity benchmark closing up more than 2% after swinging sharply between gains and losses. A day after a record slump, Australia had its biggest rise since 1997 while Hong Kong and China saw more muted moves.Treasury yields rose after plummeting almost a quarter percentage point Monday.
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