By midday, however, the rally lost steam as news from around the world indicated that the virus was continuing to spread, inflicting people in far-away lands as well as within the borders of the United States. When President Trump announced he was giving a press briefing at 6:00 pm ET (later moved to 6:30 pm ET) on the government's response to the virus, stocks faltered badly, as all but the NASDAQ gave up gains and ended in the red.
"Sell. Everything. Now. You may curse me today, tomorrow, and even next week, but a couple of months down the road, you'll see why I am telling you to get out of stocks now."At the press briefing, the president appeared confident, though cautious, appointing Vice President Mike Pence to spearhead the federal government's response.
So much for hope, false hope, bravado, and confidence. COVID-19 already is worse than MERS or SARS in the number of inflictions and deaths, and there seems to be no stopping it. Even employing extreme measures such as travel bans and quarantines, is unlikely to completely halt the spread of this pathogen; governments are hoping at least to contain it and prevent it from becoming an overwhelming medical crisis as it already has become in China, and soon, South Korea, Japan, Italy, and elsewhere.
Underpinning the obvious threat to health and well-being, Wall Street and investment centers around the world are focused on the after-effects. Idled workers, slowing production, chinks in the supply chain, and slack demand are all tied to efforts to contain the virus and will certainly have adverse effects on the bottom lines of many companies.
Now, almost two months since the crisis began in China, fears of a near-global shutdown of financial and business activity is becoming a frightful scenario.
As one pundit wrote to friends yesterday, "Sell. Everything. Now. You may curse me today, tomorrow, and even next week, but a couple of months down the road, you'll see why I am telling you to get out of stocks now."
This is precisely the sentiment Wall Street hopes would never surface, but it's becoming more and more evident to more and more people that COVID-19 presents an existential threat to global commerce.
Oil was down sharply on the day, as WTI crude futures broke below $50 per barrel and fell into the $47 price range Thursday morning. The treasury yield curve continued its flat-to-inverted pathway, the yield on the 10-year note losing another two basis points before returning to its prior level at 1.33%, the lowest level in history.
At the Close, Wednesday, February 26, 2020:
Dow Jones Industrial Average: 26,957.59, -123.77 (-0.46%)
NASDAQ: 8,980.77, +15.16 (+0.17%)
S&P 500: 3,116.39, -11.82 (-0.38%)
NYSE: 13,046.62, -97.10 (-0.74%)
Posts
