It was the best day for stocks since 2008, but indexes still ended the week with sharp losses. This pretty much sums up the market volatility.
US stocks finished a turbulent week with gains on Friday, logging their best day since October 2008. Stocks rallied into the close after President Donald Trump declared a national emergency and announced measures taken together with the private sector to combat the coronavirus outbreak.
But despite Friday’s gains, Wall Street recorded losses this week.
With less than 15 minutes to go in the trading day, stocks headed higher again after new government measures to combat the coronavirus outbreak were revealed.
These measures include expanded testing and a website to communicate with the public on the issue.
The S&P 500 is now up 5.8%, while the Dow is up 5.7%, or 1,220 points. The Nasdaq Composite is up 5.4%.
US stocks took back some of their gains on Friday afternoon as President Donald Trump announced a national emergency over the coronavirus outbreak.
Trump also urged states, as well as hospitals, to enact their emergency protocols.
Stocks briefly dropped more than 1% while Trump was speaking but remained in the green.
The S&P 500 was up 2.5%, while the Dow was up 2.9%, or 620 points.
The Nasdaq Composite was up 2.8%.
AMC, the country’s largest theater chain, has instituted a “social distancing” policy to deal with the coronavirus pandemic.
Beginning Saturday, March 14, and continuing until the end of April, AMC will cut in half the seating capacity of every one of its theatre’s auditoriums by capping ticket sales, the company said in a press release.
AMC is also increasing cleaning efforts in theaters and at “high- touch point areas” including kiosks, counter tops, restroom areas, glass, handrails and doorknobs.
Like many other companies, Ford (F), General Motors (GM) and Fiat Chrysler Automobiles(FCA) are encouraging employees to work from home if possible, to avoid potentially spreading or catching the coronavirus.
“If the nature of your work allows for it, we are asking all GM employees and contract workers to work remotely, beginning Monday, March 16,” GM CEO Mary Barra said in a memo to employees.
Ford and Fiat Chrysler said they are also asking employees to work from home in locations around the world. These policies may not apply in China, the companies said, because workers in that country have already been dealing with the coronavirus for months. In China, the work situation is beginning to return to normal, Ford spokesman Mark Truby said.
Of course, none of this applies to workers whose jobs involve handing tools, sorting and shipping parts, testing prototype vehicles or many other jobs can’t be done from a kitchen table. All these companies’ factories remain open and, Ford’s Truby said, product development programs remain on schedule. GM said it is adjusting work schedules for manufacturing and product development workers to allow for additional cleaning to keep the virus at bay.
Fiat Chrysler is making changes at some at its plants to deal with the coronavirus threat. One worker at Fiat Chrysler’s Kokomo, Indiana, transmission factory tested positive for the virus.
“In manufacturing, we are changing our production techniques at several plants to enable greater space between employees at work-stations,” FCA CEO Mike Manley said in a note to employees.
Car dealerships are almost all independent businesses and are not owned by car manufacturers so these policies don’t apply to them. Dealerships will be dealing with this situation in their own ways.
US stocks bounced slightly higher again in the early afternoon, taking back some gains they had given up just before noon.
Stocks had opened sharply higher this morning and have been in the green all day. Investors are anxiously awaiting President Donald Trump who is expected to speak at 3pm ET. The president could declare a national state of emergency over the coronavirus outbreak.
The S&P 500 rose 4.2%, while the Dow was up 4.5%, or 950 points. The Nasdaq Composite climbed 4%.
The market isn’t a safe place lately – but cybersecurity company NortonLifeLock is soaring. Shares of NortonLifeLock (NLOK) are up nearly 20% in 2020. That’s impressive given how stocks have plunged into a bear market on coronavirus fears.
NortonLifeLock is the consumer business of what used to be known as Symantec. Broadcom (AVGO) bought Symantec’s enterprise business last year and inherited the Symantec name.
NortonLifeLock reported strong earnings last month. “Our ambition is to protect everyone’s digital life in a hyper-connected world with constantly evolving cyber threats,” said Vincent Pilette, NortonLifeLock’s CEO, in the earnings release.
And the company could see even more demand for its software that helps protect against (computer) viruses, identity theft and phishing in light of the coronavirus.
“Cyber criminals will take advantage of public fear and due diligence health measures to generate coronavirus-themed phishing attacks. We should be aware of unsolicited COVID-19 emails with specious links or attachments,” says David Simpson, a cybersecurity expert and professor at the Pamplin College of Business at Virginia Tech.
British Airways has become the latest major airline to warn of job cuts, as the coronavirus pandemic wipes out travel demand and plunges global carriers into crisis.
“We are taking decisive steps to protect our cash position and to protect jobs,” CEO Alex Cruz said in an internal memo to employees. “To be frank, given the changing circumstances, we can no longer sustain our current level of employment and jobs will be lost – perhaps for a short period, perhaps longer term,” Cruz said.
The BBC was first to report the memo. British Airways declined to comment but a source close to the company confirmed its authenticity to CNN.
Cruz said the airline industry is facing a “crisis of global proportions,” warning that airlines with weak balance sheets “are facing a dire future.”
The news comes a day after US President Donald Trump imposed a 30-day ban on travel from most of Europe, a move that prompted budget carrier Norwegian Air to suspend over 4,000 flights and temporarily lay off up to half its workers.
European markets closed the day higher, but stocks gave up many of their early gains.
The FTSE 100 was up just over 1.6%, compared to an earlier high of more than 7%.
In Italy, while the FTSE MIB closed 7% higher, it had been up more than 10%. It comes after historic losses on Thursday, when the FTSE MIB lost 17%.
Germany’s DAX and France’s CAC 40 also closed slightly higher.
It’s been yet another wild week on Wall Street.
Until the news about the coronavirus pandemic turns a corner, “a sustained recovery in is unlikely,” Donabedian added.
Economic data will undoubtedly paint an ugly picture for the months to come, but the economy and the markets should improve in the second half of this year, he said.
This is a good reminder for stock investors: long-term returns come with short-term trade offs. The selloffs may offer opportunities to snap up high-quality companies at reduced prices.
“Our goal is to take advantage of market emotion to upgrade the long-term growth potential of our portfolios,” Donabedian said.
US stocks are still in the green at midday but have given back a lot of their prior gains.
Could the market finish in the red again today?
The S&P 500 is up 1.7% at midday, while the Dow is up 380 points, or 1.8%. At its best, the Dow was up more than 1,300 points.
The Nasdaq Composite us up 1.7%.
Wall Street remains on track for its worst week since October 2008.
Stocks are on track for their worst week since the financial crisis in 2008, as investors grow increasingly worried about the economic impact of the coronavirus pandemic.
Looking at the data, “recessions accompanied four of nine major selloffs since the 1970s,” said Citi economist Andrew Hollenhorst. While the risk of a recession in the United States is elevated, he believes it’s still below 50%.
The stock selloff reflects the expected downturn in economic data in coming months. Financial conditions are also tightening, Hollenhorst said, which alone could lead to worsening economic data. But people are beginning to exercise social distancing and stay at home when they can. Market participants are carefully watching consumer behavior, the backbone of the US economy.
Spending on things like travel is likely to be substantially slower, Hollenhorst said, but as Americans stock up on food, personal care and medical supplies, other categories of consumption might actually rise.
Apple (AAPL) has reopened all 42 of its stores in China that were closed because of coronavirus, an Apple spokesperson confirmed.
The company had closed all stores as of February 1 “out of an abundance of caution” over the coronavirus outbreak. The company said the stores have been gradually reopening over the past few weeks.
Shares of US airlines are moving higher in tandem with the broader market rally.
Airline stocks have gotten wrecked this week in light of new travel restrictions between the US and Europe and falling demand because of the corona virus.
Cruise stocks are also staging a rally:
The Federal Reserve is accelerating aggressive steps designed to unclog the pipes of the financial system.
The New York Fed announced it will buy $37 billion of Treasuries on Friday alone, speeding up purchases that were planned throughout the month.
And unlike previous months when the Fed was focused on buying very short-term Treasuries, the central bank said it will also buy long-term debt on Friday including 20- and 30-year Treasuries.
The Treasury market, long viewed as the safest part of the financial system, malfunctioned on Thursday. Liquidity dried up, alarming investors.
The NY Fed tried to get the pipes moving again by offering to pump $1.5 trillion into the financial system through overnight repo operations.
The Fed also promised to start purchasing a range of Treasuries – and Friday’s announcement shows it’s making good on that promise.
Analysts say the fact that the Fed is now buying long-term Treasuries, not just T-bills, effectively marks a return to the 2008 crisis-era bond buying program known as quantitative easing, or QE.
Preliminary March consumer sentiment slipped to its lowest level since October. That’s the bad news. The good news: Sentiment wasn’t as bad as expected.
The University of Michigan consumer sentiment survey index for this month came in at 95.9 points, down from 100.9 in February, but better than the 95 points expected by economists.
Consumer sentiment fell because of the coronavirus outbreak and the sharp selloffs across global financial markets.
“Importantly, the initial response to the pandemic has not generated the type of economic panic among consumers that was present in the runup to the Great Recession,” said Richard Curtin, chief economist at the University of Michigan’s survey of consumers.
Still the data suggests further declines in the survey index as the virus spreads, Curtin said.
“Perhaps the most important factor limiting consumers’ initial reactions is that the pandemic is widely regarded as a temporary event,” he added.
The final reading of March consumer sentiment data is due on March 27 at 10 am ET.
It’s no surprise to see global markets recouping some of their epic losses from the past week.
Friday morning’s rally reflects a rebound from extremely oversold levels and bargain-hunting among investors in beaten-down stocks. It comes after the US stock market’s darkest day since 1987. In fact, it was the Dow’s fifth-worst day since the index was created in 1896.
And market sentiment is being boosted by extraordinary steps taken by global central banks. The New York Federal Reserve offered Thursday to inject $1.5 trillion into the financial system in a bid to halt the panic.
But don’t overlook the importance of Germany’s promising to spend whatever it takes to fight the economic fallout from the coronavirus pandemic.
German Finance Minister Olaf Scholz said there will be no limit to the money available and the thrifty country may even take on additional debt, according to Bloomberg News. That would be a big step for a country normally averse to borrowing.
“German FinMin Scholz unleashes the REAL bazooka today…in a shocking FISCAL ‘whatever it takes’ moment,” Charlie McElligott of Nomura wrote in a report Friday.
US stocks bounced back from their worst day since “Black Monday” in 1987 on Friday.
Wall Street entered a bear market Thursday, ending an 11-year bull market run.
Stocks rallied at the open, gaining sharply in the first minutes of trading.
Xerox is pausing its forceful takeover attempt of HP in light of the growing novel coronavirus pandemic.
Xerox CEO John Visentin said in a release that it “needs to prioritize the health and safety of its employees, customers, partners and affiliates over and above all other considerations, including its proposal to acquire HP.”
Xerox (XRX) has been attempting a takeover for several months, and HP (HPQ) has previously rejected Xerox’s bids.
The FTSE MIB, Italy’s benchmark stock index, is soaring 17% today after the Italian stock market banned short selling.
Thursday, the FTSE MIB crashed 16.9%. It hasn’t quite made back all of those losses Friday, but it’s close.
The index remains 26% lower this year as the country continues to struggle with containing the coronavirus outbreak.
