US equity futures declined overnight, suggesting a decline on Wednesday’s opening after the worst first quarter ever for the Dow and S&P 500 was triggered by the Corona virus sell-off had been.
Dow Jones Industrial Average futures fell more than 1.2%, which is a loss of around 220 points. The S&P 500 and Nasdaq should also open lower with losses of 25 and 55 points, respectively.
President Donald Trump said Tuesday evening that the US should prepare for the “very, very painful two weeks” of the rampant corona virus. White House officials predict between 1
“This will be a difficult two-week period,” Trump said at a White House press conference. “When you look at the kind of death caused by this invisible enemy at night, it’s incredible.”
On Tuesday, the Dow fell 410 points, or 1.8%, to 21,917.16, struck by American Express, which fell more than 5%. The S&P 500 fell 1.6% to 2,584.59 and the Nasdaq Composite fell nearly 1% to 7,700.10. At its session high, the Dow rose more than 150 points.
The Dow performed worst in the first quarter of all time, losing more than 23% of its value in the first three months of 2020. The 30-share benchmark had the worst quarter since 1987. The S&P 500 fell 20% in the first quarter. The worst first quarter ever and the largest quarterly loss since 2008. The Nasdaq fell more than 14% in the first quarter.
Jeffrey Gundlach, CEO of DoubleLine Capital, said that the coronavirus-driven market will deteriorate again in April and break the March low.
“The low we hit in mid-March … I would bet that low would be taken out,” Gundlach said on Tuesday in an investor webcast. “The market has really made it back into a resistance zone. … take out the low of the march and then we will reach a more permanent low.”
The coronavirus pandemic has resulted in a nationwide shutdown of the economy, stopped corporate production and left millions of American workers unemployed. The unprecedented social disruption has led to unprecedented financial hardship and volatility, ultimately creating the seasoning first quarter in history for both the Dow and the S&P 500.
“The quarter will be remembered as the fastest and largest decline in stock markets at the start of a post-war bear market,” said Jim Paulsen, chief investment strategist at Leuthold Group. “This reflects the fact that this bear is the only cause of a recession that was simply ‘proclaimed’ when the leaders announced that they absolutely needed to shut down the economy. Since a recession was assured, the bear skipped its normal foreplay and just went right to reflect a recession almost completely right away. ”
US oil had the worst month and quarter in history, losing more than 66% of its value in the first three months of the year. Demand has evaporated due to the outbreak of the corona virus and a price war between Saudi Arabia and Russia.
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told CNN that he was beginning to see “glimmers” that social distancing would help reduce the spread of the coronavirus. Meanwhile, US cases of the rapidly spreading virus have exceeded 177,000, according to Johns Hopkins University. The death rate from the virus in America has exceeded 3,400.
Wall Street also suffered heavy losses during the month. The Dow and S&P 500 fell 13.7% and 12.5% in March, respectively, as they saw the worst one-month declines since the 2008 financial crisis.
However, the shares recovered towards the end of the month. Investors hope that the market has bottomed out. Many strategists expect a V-shape recovery, a sharp decline in GDP in the second quarter and a rapid setback in the third quarter. The so-called Bond King Gundlach called these estimates “very, very optimistic”.
On Wednesday, private salary data are likely to show evaporation in job creation. Moody’s March ADP employment data released. Economists expect 125,000 jobs to drop compared to 183,000 non-government jobs in April. The Markit Manufacturing PMI and ISM Manufacturing Index for March will also be released on Wednesday.
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