The Dow Jones Industrial Average rebounded sharply Tuesday,
though not nearly enough to make up for the massive coronavirus-induced
losses suffered Monday.
The Dow climbed more than 1,000 points or over 5% by the time market's closed.
The index saw more than 500-point swings in a volatile trading day Tuesday that came
after it suffered its worst day since the "Black Monday" crash of 1987 on Monday, plunging nearly 3,000 points or 12.94%.The S&P 500 and Nasdaq also climbed Tuesday, with both indices up by 5.99% and 6.23%, respectively, at closing. Both shed approximately 12% during Monday's bloodletting on Wall Street.
A midday rally came after the Federal Reserve announced further intervention amid the coronavirus crisis,
establishing a commercial paper fund to help support the flow of credit to U.S. households and businesses.
Hopes of a further stimulus package from the Trump administration, that included money going directly into the Americans' pockets, also seemed to quell investors' anxieties about the economy after the steep sell-off Monday.
"At my direction, [Treasury] Secretary Mnuchin is meeting today with senators on additional stimulus packages," President Donald Trump
said at a press briefing Tuesday, adding that the administration is looking at a range of relief from help
for the airline industry to loans for small businesses to financial flexibility for fast food workers.
In the most dramatic move to help average American workers, Treasury Secretary Steven Mnuchin also announced that the administration is looking at
sending checks directly to households that are hurting -- possibly within the next two weeks, supporting an idea that began in Congress.
"We are looking at sending checks to Americans immediately. What we heard from hardworking Americans, many companies are now shut down whether bars or restaurants, Americans need cash now and the president wants to get them cash now. I mean now in the next two weeks," Mncuhin said. "We want to make sure Americans get money in their pockets quickly," he said, adding that more details would be revealed later today.
Earlier Tuesday,
economists at S&P Global announced that they forecast a global recession will likely hit by the end of the year as a result of the COVID-19 pandemic.
"The initial data from China suggests that its economy was hit far harder than projected, though a tentative stabilization has begun," S&P Global's chief economist Paul Gruenwald said in a statement.
"Europe and the U.S. are following a similar path, as increasing restrictions on person-to-person contacts presage a demand collapse that will take activity sharply lower in the second quarter before a recovery begins later in the year," Gruenwald added.
Premarket trading on equities saw heavy volatility Monday night and into Tuesday morning, especially after President Donald Trump tweeted that the U.S. will be "powerfully supporting" industries impacted by the economic fallout of the coronavirus outbreak.
Since the COVID-19 outbreak, the Dow has seesawed by more than 1,000 points and entered a bear market for the first time in 11 years. The S&P 500 and Nasdaq are also in bear market territory.
Comment: Volatility and predictions of a downturn in the markets continue despite enormous stimulus pledges, RT
reports:
Asia-Pacific markets finished significantly lower on Wednesday again, shrugging off the stimulus pledges by world leaders. Investors fear the measures may still not be enough to protect economies though the crisis.
Hong Kong's Hang Seng index closed down over four percent while China's Shanghai Composite was off almost two percent. Japan's Nikkei 225 was trading 1.68 percent lower.
Australia's S&P/ASX 200 was the worst performer in the region, dropping by almost seven percent. South Korea's Kospi ended the day down 4.9 percent.
European stock markets have also felt the jitters, with the Stoxx 600 index falling 3.3 percent in early trading. Germany's DAX was off almost five percent while France's CAC 40 index has slid over four percent. Britain's FTSE 100 was trading five percent lower as of 10:00 GMT.
Fears of a deep downturn have been shaking markets despite the stimulus packages announced by the US, UK, and the Eurozone.
"Volatility across markets has created considerable anxiety amongst investors trying to gauge the effectiveness" of various healthcare, monetary and fiscal policy responses, said Bob Michele, global head of fixed income at JP Morgan Asset Management, in a research note seen by CNBC.
The US Federal Reserve announced plans on Tuesday to unfreeze the $1 trillion commercial paper market that should help businesses get short-term loans to pay workers and finance inventories. The UK has unveiled a £330 billion plan to fight the Covid-19 pandemic, with the EU bringing out a £37 billion support package.
Following the report above that US made some gains on the 17th March, on the 18th US stocks
plunged 1,400 points right after the opening bell:
The S&P 500 index and the Nasdaq Composite have lost over seven percent, leading to a 15-minute "circuit breaker" halt at around 1 pm Eastern time.
Shares trading on the London, Frankfurt, and Paris bourses faced another day of huge losses, with key indices falling between three and five percent.
Stocks in Australia led the losses in Asia Pacific with the country's S&P/ASX 200 index falling more than six percent. Hong Kong's Hang Seng index dropped more than four percent. China's Shanghai Composite and Japan's Nikkei 225 were both down, losing more than one and a half percent.
The US stock market has been on a rollercoaster ride - massive drops followed by huge rebounds - as investor panic driven by the spread of the coronavirus sets in. On the financial markets, it was also reflected by the CBOE Volatility Index, which is sometimes referred to as the Fear Index. The index tends to rise during market turmoil, and it soared to historic highs earlier this week.
The Dow and S&P 500 entered a bear market last week, putting an end to the historic bull run. The Dow is already more than 30 percent off its all-time high of around 29,500 points seen in February, to around 20,000 points on Wednesday.
The oil price has dropped to its lowest level since 2003 as demand for energy
halts and amidst fears of a global recession:
The price of US West Texas Intermediate (WTI) for April delivery fell six percent and was trading below $26 per barrel. If prices continue to drop, by the end of the day they could close at the lowest level since May 2003.
Futures for the international benchmark, Brent crude, were down more than three percent, trading below $28 per barrel as of 10:00am GMT.
On Tuesday, Goldman Sachs slashed its oil price forecast again citing "unprecedented" demand losses. The bank now expects both WTI and Brent to trade at around $20 per barrel in the second quarter.
Apart from the coronavirus, the ongoing row between two major oil producers, Russia and Saudi Arabia, has been affecting the energy market. After the two failed to reach a new deal on production cuts, Saudi Arabia pledged to dramatically ramp up production and give discounts to its buyers in a move that may further shake the already oversupplied market.
Meanwhile, Russian state lender Sberbank says that it has already been looking into worst-case scenarios for the economy amid the coronavirus pandemic. According to Sberbank CEO Herman Gref, the most stressful outcome includes oil going down to $20 per barrel and Russia's national currency tumbling to 100 rubles per dollar. However, Gref believes that the bank will manage to stay afloat even under those circumstances.
Comment: Volatility and predictions of a downturn in the markets continue despite enormous stimulus pledges, RT reports: Following the report above that US made some gains on the 17th March, on the 18th US stocks plunged 1,400 points right after the opening bell: The oil price has dropped to its lowest level since 2003 as demand for energy halts and amidst fears of a global recession: