Hi Everyone,
The stock market finished deep in the red as investors got spooked over the possibility of a longer-than-expected lockdown period in Europe and the U.S. The Dow was down 974 or 4.4%, to 20,944, the Nasdaq lost 340, or 4.4%, to 7,361, while the S&P 500 fell by 114, or 4.4%, to 2,471. Decliners outnumbered advancing issues by a 9-to-1 ratio on the NYSE, where volume was moderately heavy.
Traders said that the following two days of “under-the-hood” weakness, bears returned in earnest to Wall Street today, especially in the financial sector. As one trader explained, “A lot of investors are starting to doubt the V-shaped economic recovery that last week’s furious rally pointed to, and today, a lot of them headed for the exits at the same time, leading to carnage in the most virus-sensitive sectors.”
The President’s warning regarding a very painful two weeks was yet another confirmation of the severity of the U.S. COVID-19 outbreak, which already led to the over 4,500 deaths in the U.S. While several members of the Trump Administration have been upbeat regarding the length of the domestic lockdown period, the continued exponential growth in the number of cases made even the President more cautious. That said, even though investor sentiment turned bleak today, the better-than-expected economic numbers could mean that the U.S. economy will be more resilient than the pessimistic forecasts.
While all of the key sectors finished the day with sizable losses, consumer staples and healthcare stocks fared relatively well thanks to the increased safe-haven inflows. Treasuries and gold also rallied, and even the dollar managed to gain ground, despite the Fed’s enormous efforts to ease the global dollar-shortage. The major overseas indices followed the U.S. benchmarks lower, as even though the epicenter of the pandemic is now clearly in the U.S., the financially weak European countries could present the biggest problem for the global economy.
As always, have a great evening, stay calm, stay home, stay healthy, do your part to flatten the curve and stay tuned!!!
Joe
