In this March 25, 2020 file photo, a closed sign hangs in the window of a shop in Portsmouth, N.H., due to coronavirus concerns. (AP Photo/Charles Krupa, File)
Stocks swung back down Wednesday after more signs piled up of the economic damage being caused by the coronavirus outbreak.
Markets have been stuck cycling between fear and budding optimism in recent weeks as investors try to guess how long and deep the looming recession will be, with the switch often flipping overnight or even within the same day. Economists have been slashing their forecasts in preparation for what they say may be the worst downturn since the Great Depression, but several reports that came out Wednesday were even more dismal than expected.
Retail sales sank a record 8.7% last month as lockdowns around the country to slow the spread of the virus closed stores and kept people at home. A separate survey of business conditions for manufacturers in New York state plunged to its lowest level in history, by a wide margin. Industrial production across the country also failed to meet economists’ already low expectations.
Stocks around the world and Treasury yields were already down in early Wednesday trading, and their drops accelerated after the release of the reports. Lower yields are a sign that demand for relatively safe investments like U.S. government bonds is increasing.
The S&P 500 was down 2.4% after the first half-hour of trading. The Dow Jones Industrial Average fell 494 points, or 2.1%, to 23,455, and the Nasdaq was down 1.9%.
Energy stocks took the sharpest losses after oil prices plunged to another 18-year low. Those in the S&P 500 index fell 5.8%.
Demand for oil around the world will fall this year by a record amount, the International Energy Agency said Wednesday. Benchmark U.S. crude touched its lowest price since 2002 before recovering slightly to $20.14 a barrel, little changed from a day earlier. Brent crude, the international standard, fell $1.27 to $28.30.
Earlier, the International Monetary Fund said this year's global economic output will shrink by 3%, a bigger loss than 2009's 0.1% decline during the financial crisis. That was a sharp reversal from the Fund's January forecast of 3.3% growth before the virus prompted governments to shut down factories, travel and other industries.
“The IMF forecast a deep economic winter," said Hayaki Narita of Mizuho Bank in a report. Narita said.
In Europe, London's FTSE 100 lost 2.5%, and the DAX in Frankfurt declined 3.2%. The CAC 40 in France retreated 2.9% to 4,437. The Nikkei 225 in Tokyo declined 0.5%, and Hong Kong's Hang Seng was off 1.2%.
Investors are focusing on how and when authorities may begin to ease business shutdowns and limits on people’s movements imposed to slow the spread of the coronavirus. The S&P 500 had jumped 3.1% just a day earlier in hopes that the outbreak was leveling off in some hotspots and could lead to parts of the economy opening back up.
U.S. President Donald Trump has been discussing how to roll back federal social distancing recommendations. U.S. governors are collaborating on plans to reopen their economies in what is likely to be a gradual process to prevent the coronavirus from rebounding.
China has reopened factories, shops and other businesses after declaring victory over the outbreak but forecasters say it will take months for industries to return to normal output, while exporters will face depressed global demand.
Stocks closed higher Wednesday, with the Nasdaq making gains for the third day in a row despite this morning's CPI data showing inflation continues to run hot. The report showed that CPI ticked up to 7% in December, and while it was the biggest jump since 1982, the data was broadly in line with Wall Street's expectations. Mark Lehmann, CEO of JMP Securities, a Citizens Company, joins Cheddar News' Closing Bell to discuss today's close, the Fed's proposed monetary tightening, and more.
As more and more consumers are experiencing empty shelves at their grocery stores, Phil Lempert, editor of SupermarketGuru.com, spoke with Cheddar's Ken Buffa to discuss the changes in the supply chain that have trickled down into our grocery stores. "It's really three major factors: number one is climate change, number two is labor, and number three is transportation," he explained. Lempert also called on people to shop with local, independent grocers, calling it "critical to our infrastructure."
CPI rose 7% from a year prior in December, showing that inflation has continued to increase at its fastest pace since June 1982. Consumers are feeling the pressure when it comes to food, apparel, and used car prices, but got some relief in December as energy prices ticked slightly lower month-over-month. How will this ongoing inflation streak impact U.S. monetary policy as the Federal Reserve says it's prepared to implement aggressive tactics like raising interest rates? John Leer, Chief Economist at Morning Consult, joins Cheddar News' Closing Bell to discuss December's CPI data, what it means for consumers, how the Federal Reserve can help limit inflation, and more.
One startup is working to reverse climate change one seed at a time. Terraformation is a global forest accelerator that provides tools, training, financing, and business support to help scale forest restoration projects worldwide. Forests naturally absorb carbon and Terraformation says that reforestation is a safe, low-cost, and scalable solution to the climate crisis. Yee Lee, VP of growth at Terraformation, joins Cheddar Climate to discuss.
Back in February 2021, Twitter announced its three-year plan to double development velocity, to reach 315 million monetizable users, and double its total annual revenue. Chief Customer Officer Sarah Personette, joined Cheddar to discuss where the social media giant stands now a year after the announcement. "The progress against all three of those pillars has been substantial, and we'll continue to drive that over the course of the next year and beyond," she said. Personette also discussed the leadership of Twitter's CEO Parag Agrawal who took over for founder Jack Dorsey late in 2021.
Tony Horton, fitness guru and creator of the famous P90X workout joins Cheddar News to discuss how people can stay focused and maintain fitness in the new year.
Meet Corrine Tan, American Girl’s 2022 Girl of the Year. Corrine is the first doll of Chinese descent from the company, debuting in response to a rise in hate crimes against the Asian American community. Jamie Cygielman, president and general manager of American Girl, spoke to Cheddar about the long development of the character. "As the pandemic began we started to see a lot of anti-Asian sentiment across the country," she said. "We sort of blended all of these stories together to create Corinne, an outline for Corinne, and then partnered with the wonderful author Wendy Shang to help tell that story to our fans." Cygielman also touched on linking up with AAPI Youth Rising, donating $25,000 for education efforts.
Janet Phan, founder of Thriving Elements and author of 'Boldly You,' joins Cheddar News to discuss the importance of being a mentor and how her organization is helping the next generation of STEM leaders.
