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Stocks Tank, Triggering Circuit Breaker



Article originally on Yahoo! by Javier E. David Emily McCormick & Nishant Mohan

U.S. stocks tumbled by more than 7% Thursday, with Wall Street poised to extend its historically ugly sell-off, after President Donald Trump announced new plans intended to contain the human toll and economic impact of the worsening coronavirus outbreak that has whipsawed global markets.

The World Health Organization officially designated the coronavirus outbreak a pandemic on Wednesday, as the virus spread across more than 100 countries and infected well over 100,000 individuals.

Growing alarm about the severity of the pathogen — and the economic toll — has sent markets into a tailspin. Weeks of panic-driven selling has dragged blue-chip stocks into bear market territory at a breathtaking pace, of less than a month from peak to trough.

In a televised address, Trump said he was planning to suspend travel from certain areas of Europe to the U.S. for the next 30 days. He also announced plans for $50 billion of low interest loans to affected businesses and suggested a delay in the April 15 tax filing deadline.

However, the speech sparked widespread confusion — and failed to mollify panic-stricken investors. Major benchmarks sank deeper into correction territory at the open, triggering a circuit-breaker during the regular session shortly after 9:30 a.m. ET.

“President Trump’s address to the nation was symptomatic of the lack of policy coordination in the face of a global coronavirus pandemic,” Oxford Economics’ Gregory Daco said.

“Markets reacted negatively to what was perceived as a solemn but confused speech that placed blame on other nations, omitted to focus on immediate actions to relieve the most affected individuals, and lacked in concrete fiscal and health measures to address the economic and financial impact of the virus,” the analyst added.

The selloff suggests investors were hoping for much more — such as what Academy Securities’ Peter Tchir suggested should have been a worldwide fiscal stimulus plan coordinated among large economies.

“I'm disappointed with what we got,” Tchir added. And other market professionals were even more alarmed.

“The U.S. limiting entry to foreign nationals from Europe has the potential to cause another world depression again even if it is for reasons that seek to stop the spread of the coronavirus,” MUFG economist Chris Rupkey said.

“Business activity is going to hit the brakes around the world and stock markets around the world are in freefall as the spread of this deadly pandemic virus has the potential to slow the global economy to a crawl,” he added.

Other proposals under consideration by the Trump administration included a payroll tax cut and expanded worker protections, to help counteract any economic fall-out from the ongoing coronavirus outbreak.

While some of these ideas have been met with resistance in the House, Eurasia Group’s Todd Marino wrote late Wednesday that “the snowballing impact of the coronavirus in coming weeks, combined with a White House push, will likely result in bipartisan alignment—rare in an election year—on [a] big-bang stimulus.”

U.S. stocks showed no signs of catching a break from selling during Thursday’s session, with each of the three major indices holding onto losses of at least 7.9%.

The Energy and Financials sector led declines intraday Thursday, with each off more than 9%. In the 30-stock Dow, materials giant Dow Inc. (DOW), American Express (AXP) and Boeing (BA) were the biggest decliners.
Here were the main moves in markets, as of 11:50 a.m. ET:
  • S&P 500 (^GSPC): 2,523.87, down -217.51 points or -7.93%
  • Dow (^DJI): 21,469.01, down -2,084.21 or -8.85%
  • Nasdaq (^IXIC): 7,321.52, down -632.46 or -7.97%
  • Crude (CL=F): $31.63, down -$1.35 or -4.09%
  • Gold (GC=F): $1,573.30, off -$69 or -4.2%
  • 10-year Treasury (^TNX): yielding 0.787%, down 3.4 basis points
Are you uneasy about the stock markets? Give us a call at 877-340-1717. We'd love to sit down with you and go over your concerns.
Best regards,
Womack Investment Advisers, Inc.
WOMACK INVESTMENT ADVISERS, INC.
Oklahoma / Main Office: 1366 E. 15th Street - Edmond, OK  73013
California Office: 4660 La Jolla Village Dr., Ste. 100 - San Diego, CA 92122
Phone (405) 340-1717 - Toll Free (877) 340-1717

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