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.
Dealmaking surged in 2021 as mergers and acquisitions activity topped $5 trillion. Paul Aversano, managing director and global practice Leader of Alvarez & Marsal's Global Transaction Advisory Group, joined Cheddar to look at how market factors came together to drive the flurry of transactions. "I like to say it's almost a perfect storm for M&A activity," he said. Aversano pointed to a backlog of activity following the slowdown in 2020, "dry powder" unallocated capital in private equity firms, and federal stimulus as some of the reasons behind the burst of changes.
Global delivery service FedEx just received the first five of an order of 500 light commercial electric vehicles from GM's BrightDrop brand. Mitch Jackson, chief sustainability officer for FedEx, joined Cheddar to discuss the deployment of the EV600 delivery vehicles, if the new fleet will get the company to carbon neutrality by 2040, and how cost-effective they might be. "We've been working with electric vehicles for 10 years, and what we've find over that time frame is that we save over half of our operational and maintenance costs with the use of EVs over internal combustion engines, "Jackson said. "So they're economically viable."
A group of shareholders is demanding Amazon run an independent audit to assess how the company treats its employees. Mary Beth Gallagher, the director of engagement at Domini Impact Investments, the group that filed the resolution, told Cheddar it wants to invest in companies that protect shareholders and specifically noted concerns about productivity quotas and employee surveillance. The company's worker safety initiatives have been questioned even before a tornado killed six people at an Amazon warehouse in Illinois this month. "What we want to see is Amazon centering workers' voices and having an independent review that hears directly from workers themselves who know the conditions that they're working under and the pressures they face," she said.
Trip.com is now adding Hopper's price freeze feature for its users. The feature will help travelers save money by protecting them from pricing volatility when booking their next trip. The company is the first online travel agency to partner with Hopper's B2B initiative, Hopper Cloud. Dakota Smith, chief strategy officer at Hopper, joins Cheddar News to walk us through the feature and how the company is addressing Omicorn concerns.
'Spider-Man: No Way Home' caught moviegoers in its web this weekend at the box office. The film premiered at $260 million in U.S. ticket sales, making it the second-best domestic debut of all time and the biggest opening since the pandemic began. Shawn Robbins, chief analyst at BoxofficePro.com, joins Cheddar News to discuss the film's success.
Ahead of the new year, award-winning journalist and TV anchor Soledad O'Brien and financial expert Jean Chatzky are teaming up to launch a brand-new podcast called "Everyday Wealth," aimed at helping listeners unlock their financial potential. O'Brien and Chatzky joined Cheddar's "Opening Bell" to discuss which topics to expect, as well as the importance of financial literacy. "I think what I'm good at is asking uncomfortable questions," said O'Brien, detailing how the podcast might stand out from others. "And sometimes when it comes to talking about money, a lot of those questions are uncomfortable."
Spider-Man is hoping to come to the rescue of movie theaters as they struggle to recover from the pandemic. "Spider-Man: No Way Home" starring Tom Holland is officially out in theaters and is expected to generate a whopping $150 million in its box office debut. Sean O'Connell, managing editor of CinemaBlend, joined Cheddar to discuss his expectations for the new Marvel movie, and what the entertainment industry is doing to prepare for a potential winter surge in COVID cases.
As companies figure out how to adapt to the ever-changing COVID world, mergers and acquisitions are on the rise. A new report from PwC reveals 2021 saw the most megadeals, transactions of at least $5 billion, in the U.S. Colin Wittmer, PwC's U.S. deals leader, tells Cheddar how companies can set themselves up for deals success.
The last year saw a massive uptick in CEO turnover, with over 1,200 chief executives leaving their posts in 2021. According to a recent report from Challenger, Gray & Christmas, the main reasons cited were talent management, retention, hiring, and reimagining the workplace post-covid. Andrew Challenger, Senior Vice President, Challenger, Gray & Christmas, Inc. joined Cheddar's Opening Bell to discuss.
