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.
Sam Stovall, Chief Investment Strategist at CFRA, joined Cheddar News' Closing Bell to break down what's happening on Wall Street, as inflation, rising interest rates, and supply chain disruptions combine to drive markets lower.
In the wake of Robinhood announcing it will be letting go of 9 percent of its staff, Caleb Silver, Investopedia editor-in-chief, joined Cheddar News to talk about the growing pains that the trading platform is going through, how it is affecting its user experience, and where it goes from here. “I think you're gonna see a little bit more automation, but that's how Robinhood was built," he said. "I think what you'll see is less marketing." Silver also noted that the steep drop in the stock price leaves it potentially open to being acquired. "I'm not saying that I know anything about this, but they're looking awful cheap. And when you think about what's going on with Twitter and some of these other platforms, you can see a buyer coming for Robinhood any minute now."
Stocks closed slightly higher Wednesday as the Nasdaq closed flat after a failed attempt to close higher. Investors are keeping an eye on earnings, which so far have been shaky for big tech giants and companies that typically drive the market. Garrett Phillips, Managing Partner at 3Summit Investment Management, joins Closing Bell to discuss today's close, our current volatile environment, where to invest in the current environment, and more.
Ron Carson, CEO and Founder of Carson Wealth, sits down with Cheddar's Hena Doba to share how he achieved 'work-life harmony' by investing time and money into businesses he's passionate about.
Jan Lee, co-founder of Neighbors United Below Canal, joins Cheddar News to discuss how the new mega jail in NYC's Chinatown will negatively impact the community.
Melissa Eamer, founder and CEO of aging wellness brand Modern Age, joins Cheddar News to discuss the recent launch of its digital experience and flagship in New York City.
Danny Trejo is teaming up with Tostitos the once again for Cinco de Mayo. The actor and restaurateur is starring in the tortilla chip brand's commercial with Sofia Reyes to inspire others on how to celebrate the holiday. The "Machete" star joined Cheddar News to talk about the campaign. "I only do things I like, and I like Tostitos," he said. "You know, I love their Scoops. They don't break in the guacamole."
With National Infertility Awareness Week underway, the fertility and family-building benefits provider for employers, Kindbody, is looking to make a full suite of treatments and care accessible — including for LGBTQ+ patients. Founder and chairwoman Gina Bartasi joined Cheddar's Opening Bell to talk about the importance of infertility awareness, what role employers play in offering benefits, and how to remove the stigma around the fertility conversation. "We have to talk about the patient holistically, not just fertility services, but what can we do from a mental health standpoint to support patients," she said. "Most patients talk about fertility being more stressful than divorce, infertility being more prevalent than cancer or diabetes. So it is our mission, remains our mission, to elevate awareness around infertility, not just [during] National Infertility Awareness Week."
With a constrained supply of housing in the most desirable markets, home prices have risen nearly 20 percent year-over-year in February. David O’Reilly, CEO of Howard Hughes Corporation, joined Cheddar News to talk about where people are migrating to, and away from, leading to red hot real estate. "We see clearly the most demand is going into those states that I would define as warmer and less expensive, those secondary cities like Houston, Phoenix, and Las Vegas, where individuals are trading in higher traffic and lower quality of life for more affordability," he said. O'Reilly pointed to urban centers in the Northeast and West Coast as seeing the most losses in residents.
