Jeff Fawkes is a seasoned investment professional and a crypto analyst. He has a dual degree in Business Administration and Creative Writing and is passionate when it comes to how technology impacts our society.
Dow futures drop 1100 points because Donald Trump didn’t manage to convince investors that coronavirus is not as dangerous as they feel. Market goes red again.
People on the market keep panicking despite the U.S. president Donald Trump‘s speech. Dow continues the fall after investors didn’t believe that the situation is under control.
The Dow industrial index looks scary because its 11 years-long bull market has ended with a two months bear market. It already took approx. 20% of all the gains made over the years. Now, the Dow futures reportedly lost 1,100 points during the opening, and the NASDAQ and S&P500 futures went down simultaneously.
During the emergency speech, Donald Trump said that European citizens and tourists are not able to travel to the U.S. for 30 days. He promised financial payouts to the people who receive coronavirus or help the contaminated crowds in hospitals. Also, the ill workers will receive payments for the time they need to spend at home. More and more countries of the world keep enabling quarantine zones and extra measures to protect the country from contamination, panic, and economic trouble.
Investors Weren’t Too Happy and Kept Selling
“The crux of the angst investors are feeling as the coronavirus spreads surround what might happen to consumer spending. Consumers sitting at home and not out spending money because they fear catching the coronavirus is the ultimate negative outcome. It has been the U.S. consumer who has been driving the recovery bus during this long expansion.”
As the investors understand that the situation will only get worse, they expect more economic guarantees. The whole country expects that the virus will be spreading till June, as the doctors say. National Basketball Asociation is suspending the upcoming games thanks to coronavirus. The reason is that the Utah Jazz player got a positive result per virus test.
Maybe, if Trump said something tax-related, it would make investors more relaxed. But, as there are no possible big tax holidays, people sell their valuable stuff to buy masks. Or, to hedge against the risks and save profits gained in the past.
Also, many people are concerned about the decision to move 30,000 of the American soldiers to Europe, mostly to Italy. The strange thing here is that the army was sent to Europe without masks or any antivirus precautions. They suppose to spread across Europe to protect civilians from ‘threats’. Which threats? Also, the army commanders claim that those soldiers have good health so they are not in great fear regarding possible coronavirus contamination.
Many of the conspiracy theorists already raised alarms on the forums claiming Trump has the cure but keeps it in secret for some reason. Otherwise, why would you send the army to the continent while you restrict your citizens to travel there?
World Shutting Up Borders, Wall Street Sharks Predict Recession
The panic is everywhere. People in Europe are fighting in the supermarkets for a toilet paper (despite this is not even the product of everyday need).
The Wall Street sharks are worrying that the spread of coronavirus may put the global market into recession. In case the virus spreads well across the United States, indexes will fall sharply. The virus got its hand on more than 124,000 people worldwide, and there are 4,589 registered deaths. Interestingly, the virus has made many small European countries deputies take measures against corruption.
For instance, a hefty of governments issue restrictions on the export of the medical equipment and supply. This way, the governments leave local medical factories without access to the global market. However, the same governments then place huge orders on masks, gloves and protective suits. A good compensation power that will keep the medical factories above the waterline. However, looks like the supermarkets and medical factories are the only two types of business that will keep floating while coronavirus strikes.