US stocks will be in focus today, with the market crash worsening on Wednesday. For the fourth time this month, trading in the US stock markets had to be halted amid a rapid and steep decline.
Context: US stocks nosedived shortly after trading opened on Wednesday. The S&P 500 plummeted 7%, triggering the circuit breaker yet again, which paused trading for 15 minutes. The Dow tumbled to new correction lows and has lost more than 25% so far this month.
Details: The US stock market downtrend continued on Wednesday, with confirmed coronavirus cases exceeding 200,000 globally. News of companies gradually closing out their businesses sparked fear among investors. Auto leaders including Ford, General Motors and Fiat Chrysler are planning to close their manufacturing facilities in the country in response to the coronavirus crisis. Shares of auto manufacturers tumbled yesterday, with the stocks of the three majors dropping by 15%.
On a positive note, some stocks like consumer staples from coronavirus-induced panic shopping. Walmart’s shares reached a new high on Wednesday, with consumers stocking up on food and cleaning products.
The NYSE (New York Stock Exchange) announced plans to temporarily shut its trading floor from March 23 and use electronic trading alone. The decision was taken after two persons tested positive for COVID-19 at the exchange.
The Dow plunged over 1,300 points to settle at 19,898 on Wednesday, while the S&P 500 fell 5.18% to 2,398. The Nasdaq 100 dipped 4.7% to close at 6,989.84.
Coronavirus cases in the US have exceeded 9,000 with around 150 deaths. Meanwhile, Italy has confirmed more than 35,000 COVID-19 cases and its death toll stands at around 2,900. In total, there are over 219,000 cases worldwide.
What to watch: The European Central Bank (ECB) has announced a €750 billion stimulus plan to provide some relief to markets. US stock futures remained highly volatile this morning, with traders responding to every new announcement. The market will keep a close eye on the major indices today, expecting these to oscillate between gains and losses, as experienced so far with US stock futures.
Investors also await reports from the US on initial jobless claims, current account, Philadelphia Fed manufacturing index and CB leading index. Initial jobless claims, which fell 4,000 to 211,000 last week, are expected to increase to 220,000. Analysts are expecting the current account deficit to narrow to $109 billion in the fourth quarter, from a reading of $124.1 billion in the previous quarter. The Philadelphia Fed manufacturing index is expected to fall to 10 in March, from February’s reading of 36.7.
Other Markets: European indices were trading higher at 9:00am GMT, with the FTSE 100, German 30 and French 40 up by 0.1%, 0.4% and 2.5%, respectively.