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.
Next-gen social sports platform Break the Love recently raised $2.5 million in seed funding. Break the Love's platform and iOS app allows users to discover and book group-based tennis activities, to either learn, train, or compete. The new company has already gotten support from a few big names in the world of tennis, including the coach of Naomi Osaka, as well as the United States Tennis Association and the brand Wilson. Break the Love founder and CEO Trisha Goyal joins Cheddar News' Closing Bell to discuss.
The world of NFTs and cannabis are colliding as luxury cannabis company Peakz gears up to launch a digital dispensary in the metaverse. CEO Jessie Grundy and Tiffany McBride, managing director of social equity ventures at The Parent Company, an investor in Peakz, joined Cheddar to break down exactly how a digital dispensary would work. Grundy also talked about offering low-cost NFT courses in an effort to help Oakland, California, residents not miss out on new investing opportunities, and McBride discussed why the tech-forward vision of Grundy was worth investing in for The Parent Company. "He comes with really fresh ideas that he's vetted, that he's experienced in, and I really believe the thinking along Jessie's lines is the future of cannabis," she said. "He's more than just flower and a story. He comes with concepts that are new that are innovative, and that is easy for us to get behind."
Daniel O'Brien, president and global head of enterprise at HTC America, joined Cheddar's "Closing Bell" to discuss new products and services the virtual reality brand showed off at CES 2022, including a wrist tracker — in lieu of controllers — for more accurate interactions connected to its all-in-one headset, the VIVE Focus 3. O'Brien also described a cloud-based, 5G content delivery system. "We partnered up with Lumen Technologies and from six miles away we delivered high bandwidth VR to a headset directly in the Wynn Hotel during CES," he said. "And people were able to walk around in their virtual experience through a wireless signal."
Samsung unveiled a slew of new electronics and upgraded designs at CES 2022. With a heavy focus on gaming and the future of work, the company showed off its all new Odyssey Ark, which boasts a massive 55 in. curved display designed to give users a more immersive and captivating experience. Sang Kim, SVP, Samsung Electronics joined Cheddar's Michelle Castillo to discuss the company's biggest launches as well as major trends to watch in 2022.
Tesla's Austin, Texas-based gigafactory could be days away from opening its doors and beginning production. Dan Ives, managing director of equity research at WedBush Securities, joined Cheddar to talk about his estimate that the EV company will be running its factory within a week and noted that Tesla has been in a good position despite ongoing semiconductor shortages. "They're really almost Teflon-like relative to other automakers," he said, calling its production delays "containable." Amid another shortage — labor —, he said he thinks Tesla positioned itself well for access to talent months ago with expanded hiring amid the move to Texas from California.
The UK's Information Commissioner's office is scrutinizing Facebook's parent company Meta over child safety practices linked to the Oculus headset, according to a report. The agency is looking to question the tech giant about how it's protecting children from harmful experiences in virtual reality.
Hall of Fame quarterback Troy Aikman joined Cheddar's "Between Bells" to talk about his own brand of organic light beer called Eight (his jersey number with the Dallas Cowboys) and explained that he's had an interest in the industry since his days working for a distributor during college. "These brands that are on the market have been there for a long time and [I] felt that it was time for something fresh, something new, and I thought that we could do it in a way that was a better-for-you beer' and that's what we've done," he said. Aikman also provided some insight into the upcoming NFL playoffs and noted that he doesn't see a clear frontrunner for this year's Vince Lombardi trophy.
Disney has secured a patent for a digital world simulator for headset-free augmented reality expected to be accessible in parks by tracking smartphones and projecting personalized 3D displays, an indication that the entertainment giant is gearing up for its entry into the metaverse.
It has been a record year for luxury automaker Rolls-Royce despite the industry struggling to meet demand overall due to the ongoing semiconductor chip shortage. CEO Torsten Müller-Ötvös joined Cheddar to discuss the driving factors behind the company's 2021 success. He said after the pandemic forced the closure of factories in 2020 and people stopped making large purchases, they were open to spending more in 2021. "The entire luxury sector was fueled by there's money available, and people are prepared to spend money," he said.
