The raging coronavirus will close the New York Stock Exchange's floor operations on Monday, after employees tested positive for the coronavirus. (Photo by Luiz Roberto Lima-ANB/Pacific Press/LightRocket via Getty Images)
Stocks around the world rallied Tuesday amid expectations that Congress is nearing a deal to pump nearly $2 trillion of aid into the coronavirus-ravaged economy.
Top congressional and White House officials said they expect to reach an agreement Tuesday, though some issues remain. Investors have been frustrated waiting for the U.S. government to do what it can to help the economy, which is increasingly shutting down by the day after the Federal Reserve has done nearly all it can.
Signs of optimism radiated around the world. Beyond the better than 5 percent gain for the S&P 500 within the first few minutes of trading, South Korean stocks surged 8.6 percent and Germany's market returned 7 percent. Treasury yields rose in a sign that investors are feeling less fearful. Even crude oil, which has more than halved this year, rose.
The market has seen rebounds like this before, only for them to wash out immediately. Since the market began selling off on Feb. 20, the S&P 500 has had six days where it's risen, and all but one of them were big gains of more than 4 percent. After every one of them, stocks fell again the next day.
Ultimately, investors say they need to see the number of new infections peak before markets can find a bottom. The increasing spread is forcing companies to park airplanes, shut hotels, and close restaurants to dine-in customers. Altogether, estimates suggest at least 10 percent of the U.S. economy is shutting down, according to Rob Sharpe, head of investments and group chief investment officer at T. Rowe Price.
The S&P 500 was up 5.4 percent, as of 9:43 a.m. Eastern time. The Dow Jones Industrial Average rose 1,130 points, or 6.1 percent, to 19,722 and the Nasdaq was up 4.9 percent.
Economists are topping each other's dire forecasts for how much the economy will shrink this spring due to the closures of businesses, and a growing number say a recession seems inevitable.
To support the economy while health experts work to corral the virus, the Federal Reserve on Monday pledged to buy as many Treasurys and mortgage-backed securities as it takes to keep lending markets working smoothly. It's the latest in a string of extraordinary moves by the U.S. central bank.
Investors are waiting for Congress and the White House to also do what they can. They debated through the weekend and Monday on a plan to send cash to households and help support the hard-hit travel industry, among other things.
Governments and central banks in other countries around the world are also unveiling unprecedented levels of support for their economies in an attempt to limit the scale of the upcoming virus-related slump. Germany, a bastion of budgetary discipline, also approved a big fiscal boost.
Markets rose even as more dismal data came in about the global economy.
"Everyone was prepared for a set of shockers, and that is precisely what we got, but they are not a surprise," said Chris Beauchamp, chief market analyst at IG. "It is at times like this that the market's propensity to look forward is demonstrated most effectively."
A further boost to sentiment has come from the news that China is preparing to lift the lockdown in Wuhan, the epicenter of the outbreak, and from Italy reporting a reduction in the number of new cases and coronavirus-related deaths.
"It's still early days, of course — perhaps investors can start to envisage life beyond the coronavirus," said Craig Erlam, senior market analyst at OANDA Europe. "That could make stocks look a little more attractive, although anyone jumping back in now will need to have nerves of steel."
For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough. Those with mild illness recover in about two weeks. Severe illness including pneumonia can occur, especially in the elderly and people with existing health problems. Recovery could take six weeks in such cases.
The video game industry has seen monumental growth the past few years - with an increasing amount of companies jumping head first into the space. In January alone, Microsoft announced its plan to acquire Activision Blizzard, game publisher Take-Two agreed to buy Zynga, and most recently, Sony announced it has agreed to buy game developer Bungie for $3.6 billion. Tobias Batton, CEO and founder of Ex Populus, joined Cheddar Movers to discuss the surge in M&A activity in the gaming space.
Facebook parent Meta reported disappointing results in its first quarterly earnings report since rebranding to focus on the metaverse. The tech giant delivered mixed results with quarterly profit falling well below Wall Street expectations. Shares plunged more than 20 percent in after hours trading as a result. Martin Garner, COO of CCS Insight, joined Cheddar Movers to break down the company's results.
Karyn Cavanaugh, Chief Investment Officer at Carolinas Wealth Management, breaks down which industries investors should watch this earnings season and highlights which sectors have upside potential.
Super Group, the company behind leading global online sports betting and gaming businesses Betway and Spin, has landed on Wall Street. The company went public via SPAC with Sports Entertainment Acquisition Corp., and now lists on the NYSE under the ticker symbol 'SGHC.' This debut comes as the U.S. sports betting market continues to heat up with more and more states legalizing the practice. Eric Grubman, chairman of Super Group, joined Cheddar to discuss.
Miami wants to be the crypto capital of the world. Mayor Francis Suarez has gone all in on the blockchain, even accepting one of his first paychecks in Bitcoin, hosting one of the world's largest digital cryptocurrency conferences, and marketing Miami as a great place for tech experts to work. Maja Vujinovic, managing director of OGroupLLC, joined Cheddar's Fast Forward to discuss Miami's enthusiasm toward crypto, some of the potential risks that entails, and where the city might be heading when it comes to the crypto takeover.
Like so many other cities, Miami experienced a tourism boom over the summer after vaccines were distributed. But, the Omicron variant has thrown the travel industry for a loop. David Whitaker, president and CEO of the Greater Miami Convention and Visitors Bureau, joined Cheddar to discuss the city as a tourist destination, and how it has handled headwinds from the pandemic.
Miami's real estate market has boomed since early 2020, thanks to an overall strong housing market, remote work, and no income tax as incentives. The city is preparing to welcome even more residents as people relocate to warmer climates to work from home. Garrett Derderian, director of market intelligence at SERHANT, joined Cheddar to discuss the Magic City's red hot market.
Rockstar Energy, a subsidiary of Pepsico, unveiled its new beverage brand, Rockstar Unplugged, changing up the energy drink formula with hemp seed oil as an ingredient. PepsiCo Energy CMO Fabiola Torres joined Cheddar News to talk about how the product promotes “good vibes” and allows consumers to unwind and discuss partnering with "MTV Unplugged" for a concert series. "We couldn't find a better partnership that MTV," she said. "MTV Unplugged has been such an iconic proposition … and we believe that we're the right partners because the insight of our proposition for Rockstar Unplugged comes from music.
Eight months after the National Football League announced $1 million in research into cannabinoids, the NFL-NFLPA Joint Pain Management Committee has awarded the funding to two teams of medical researchers at the University of California San Diego and the University of Regina. The NFL says the studies will investigate the effects of cannabinoids on pain management and neuroprotection from concussion in elite football players, respectively. Cheddar correspondent Chloe Ailello spoke with Jeff Miller, the executive vice president of communications, public affairs, and policy for the NFL, about the studies, as well as the recent lawsuit filed against the NFL by former Miami Dolphins head coach Brian Flores. "Maybe we can learn things from other alternative pain approaches that are going to benefit our player population and then sports medicine as a whole," Miller said.
