February 27, 2020
Stock market news live: Stocks plunge as coronavirus pandemic fears rock markets; California monitoring 8400+
by Heidi Chung,Javier E. DavidandNishant Mohan
finance.yahoo.com
Markets are reeling again on Thursday, after the U.S. reported its first coronavirus case involving a person who didn’t travel to an infected country, and didn’t knowingly interact with someone who did. Experts are becoming increasingly resigned to a worldwide spread of the disease, even as China’s new infections slow.
2:55 p.m. ET: Meanwhile, in the Treasury market...
In a sign of how aggressively investors are seeking out safe-havens, the 10-Year US Treasury Yield hit an intraday record low of 1.246%, according to Tradeweb data, while the 30-Year US Treasury Yield also set a fresh record at 1.783%.
The last time yields were this low? Yesterday.
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2:05 p.m. ET: Stocks relapse on news that California is monitoring thousands of potential cases
The Golden State, which on Wednesday reported the first “community spread” case, is now monitoring 8400 people for potential coronavirus infections, according to Governor Gavin Newsom. Stocks had pared the day’s losses, but are now falling back toward session lows.
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12:35 p.m. ET: Stocks still in the red, but cut losses by more than half
Whipsaw trading in midday brings major benchmarks well off their lows: At the day’s lows, the Dow had lost nearly another 1000 points. There’s no immediate trigger point but could signal that the current selling wave may be exhausting itself (too much too soon):
S&P 500 (^GSPC): 3,088.95, down 27.44 or -0.88%
Dow (^DJI): 26,700.11, off 257.48 or -0.96%
Nasdaq (^IXIC): 8,888.63, off 92.14 or -1.03%
Crude oil (CL=F): $47.17, off $1.56 or -3.20%
Gold (GC=F): 1,647.70. up $4.60 or 0.28%
10-year Treasury (^TNX): 1.3040, off -0.0060 or -0.46%
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12:15 p.m. ET: JPMorgan shaves growth forecasts, says Fed may have to go to zero
The grim news surrounding the coronavirus outbreak keeps getting uglier with respect to global growth. On Thursday, JPMorgan Chase said it would shave 0.25 percentage points off its Q2 GDP estimates (to 1.5% from 1.75%).
While it expects a rebound in the subsequent quarters, it warned the “community spread” aspect reported on Wednesday was not built into current assumptions:
...If that were to occur the impact on growth would be difficult to quantify but almost certainly much larger than the trade-related effects we have thus far incorporated in our forecast, in our view."
Then there’s the question of monetary policy:
If our forecast is realized (which, as mentioned, has yet to incorporate any domestic community spreading) GDP growth in the first half of the year would average 1.25%, whereas for the full year (Q4/Q4) the median participant on the FOMC expects growth of 2.0%. Whether this shortfall is enough to “trigger a material reassessment” of the outlook is in the eye of the beholder. We continue to expect the Fed will reduce the target range for the fed funds rate by 25bp at the June FOMC meeting. With the expected adoption of flexible inflation averaging, a sub-trend outcome for GDP growth will make the attainment of above-2% inflation not credible as a forecast. That credibility will be further strained as growth now appears to be even softer heading into that meeting. If the growth situation necessitates more than one or two cuts then it is likely the next step is to move quickly and aggressively to the effective lower bound on interest rates, which we believe is 0.0%."
11:02 a.m. ET: IMF warns on virus’ impact to global growth
Via Reuters, the fast-spreading coronavirus will clearly have an impact on global economic growth and the International Monetary Fund is likely to downgrade its growth forecast as result, a spokesperson said.
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10:40 a.m. ET: Selling intensifies, all major benchmarks deep in the red
An ugly day is getting uglier:
• S&P 500 (^GSPC): 3,024.97, down 91.42 -2.93%
• Dow (^DJI): 26,210.16, off 747.43 or -2.77%
• Nasdaq (^IXIC): 8,682.66, off 298.11 or -3.32%
• Crude oil (CL=F): 46.34, off $2.39 or -4.90%
• Gold (GC=F): $1,656.50, up $13.40 or 0.82%
• 10-year Treasury (^TNX): 1.2610, down 0.0490 or -3.74%
And the mood on Wall Street is grim: Goldman Sachs now expects no earnings growth this year at all:
We have updated our earnings model to incorporate the likelihood that the virus becomes widespread. Our revised baseline EPS estimates are $165 in 2020 (previously $174) and $175 in 2021 (previously $183), representing 0% and 6% growth. Our reduced forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, supply chain disruption, a slowdown in US economic activity, and elevated uncertainty. Consensus forecasts imply EPS will climb 7% in 2020 and 11% in 2021."
10:10 a.m. ET: Tesla, Apple fall hard as China/virus fears bite
SHANGHAI, Jan. 7, 2020 -- Tesla CEO Elon Musk speaks at a delivery ceremony for Tesla China-made Model 3 in Shanghai, east China, Jan. 7, 2020. U.S. electric carmaker Tesla officially delivered the first batch of 10 made-in-China Model 3 sedans to the public Tuesday afternoon, one year after the company broke ground on its first overseas plant. The company also announced the launch of a project to manufacture Model Y vehicles in its Shanghai gigafactory.
http://finance.yahoo.com/news/stock-market-news-live-updates-february-27-2020-122658989.html
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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