Market Snapshot: Dow futures plunge as coronavirus slams market, Fed official warns unemployment could hit 30%

U.S. stock-index futures were headed lower on Monday, but off their worst levels, after falling by the most allowable for the day Sunday evening, as the cases of coronavirus globally topped 340,000 and investors appeared unhappy with a lack of government action to address the current and expected fallout from the COVID-19 pandemic.

On top of that, a U.S. central bank official estimated that the unemployment rate could surge from just over 3% to 30% at its peak as businesses shutter in an effort to clamp down on the spread of the deadly illness.

How are market performing?

After plunging 5% early in the session, futures for the Dow Jones Industrial Average

YMM20, -2.98%

were last down 491 points, or 2.5%, at 18,560; those for the S&P 500 index

ESM20, -2.89%

were off 56.25 points, or 2.4%, at 2,233.25; while Nasdaq-100 futures

NQM20, -2.28%

were down 142 points, or 2%, at 6,827.50.

All three index futures hit their 5% daily limit at the open of trade, which began at 6 p.m. Eastern. Futures index moves that are greater than 5% trigger so-called limit-up and limit-down rules.

On Friday, the Dow

DJIA, -4.55%

 fell 913.21 points, or 4.6%, at 19,173.98, representing the lowest level for the blue-chip gauge since Oct. 10, 2016. The S&P 500 index

SPX, -4.34%

closed at 2,304.92, down 104.47 points or 4.3%, marking its lowest level since Feb. 8, 2017, and the Nasdaq Composite Index

COMP, -3.79%

shed 271 points to end at 6,879.52, a decline of 3.8% after hitting a high at 7,354.44 on the session.

The Dow is off 35.1% from its Feb. 12 peak, while the S&P 500 is 32% and the Nasdaq is down nearly 30% from their Feb. 19 peaks, according to Dow Jones Market Data.

What’s driving the market?

Markets tumbled after an important Senate vote on coronavirus rescue package failed to gain sufficient traction. The vote was 47 to 47, but needed 60 votes to proceed. Senate Democrats voted against starting a 30-hour clock toward a vote.

Democrats have argued the details of the bill were geared toward helping Wall Street more than Main Street, as COVID-19, the infectious disease that has been contracted by more than 300,000 people globally, rapidly spreads and threatens to throw the domestic and global economy into a recession. The U.S. has seen more than 32,000 cases so far.

Sen. Chuck Schumer, a New York Democrat, on Sunday called the coronavirus bill a “corporate bailout” without protections for everyday workers.

President Donald Trump, during a Sunday news conference of the coronavirus task force, said he expects a package to get completed.

The failure of the bill highlights a lack of consensus between Democrats and Republicans to coalesce around a package at a crucial time for the economy and the financial market, which has been hammered as the virus has ground business activity to a halt.

Trump also said Sunday that he has activated the National Guard to help respond to the coronavirus outbreaks in California, New York and Washington, where much of those states are on lockdown.

On top of that, Federal Reserve Bank of St. Louis President James Bullard told Bloomberg News during a Sunday interview that he is forecasting the U.S. unemployment rate to hit 30% in the coming months as the world continues to grapple with the coronavirus pandemic. “This is a planned, organized partial shutdown of the U.S. economy in the second quarter,” he said.

Bullard also said he expects an unprecedented 50% plunge in gross domestic product. as the rest of the world is confronting the possibility of a deep recession.

“Financial markets remain in a state of panic, with world stocks tanking on Monday to extend heavy losses from Friday, as a worsening pandemic and mounting national lockdowns leave traders no choice but to continue pricing in a deep global recession.,” said Marios Hadjikyriacos, investment analyst at XM, in a Monday research note.

What's your reaction?
Happy0
Lol0
Wow0
Wtf0
Sad0
Angry0
Rip0
Leave a Comment

escort eskişehir escort samsun escort gebze escort sakarya escort edirne