- The Dow Jones Industrial Average (DJIA) plunged more than 600 points on Wednesday.
- A suburb of New York goes into “life and death” lockdown to slow the coronavirus spread.
- Bank of England makes emergency rate cut to minimize the “large and sharp” economic impact.
The U.S. stock market slumped toward a grisly day on Wall Street as the coronavirus threatens to lock down the financial capital of the world. New York state announced military containment measures last night, sending the Dow Jones Industrial Average (DJIA) sharply lower.
The National Guard will oversee a one-mile containment region in the New York suburb of New Rochelle in an effort to slow the spread of Covid-19. The community is home to the largest cluster of U.S. coronavirus cases.
Governor Andrew Cuomo stated in no uncertain terms:
This is literally a matter of life and death.
The total number of coronavirus cases in the U.S. soared above 1,000 with 173 in the New York area.
Dow careens lower
Despite Tuesday’s spirited rally at the end of the trading day, the Dow Jones plunged when the stock market opened on Wednesday.
The Dow was last down 663.39 points or 2.65% at 24,354.77.
The S&P 500 and Nasdaq endured similar pullbacks, falling 2.74% and 2.47%, respectively.
New York City lockdown coming?
The emergency containment area in New Rochelle may be an early indication of what’s to come. New York City may be next. Mayor Bill de Blasio admitted that Covid-19 cases in the city are rising fast.
They’re coming in so intensely now that being able to give you a detailed case breakdown, we’re not in that position to do that at this moment because there are so many coming forward.
The United Nations has already closed its doors to the public and cancelled guided tours. A number of schools in the region have closed and as many as 2,000 NYC residents are under self-quarantine. Restaurants have already reported a large dip in custom. Mayor de Blasio urged people to work from home, citing New York City’s dense population as a high-risk environment.
The challenge is people just packed like sardines.
Coronavirus cluster in New Rochelle
The largest Covid-19 outbreak on the east coast is in New Rochelle, Westchester County. The cluster of more than 100 cases are linked to an Orthodox Jewish synagogue where a lawyer is believed to be the first case.
Governor Cuomo has announced a one-mile containment area. Schools and large social gathering spaces are closed until at least March 25th. The National Guard will deliver food to quarantined patients and clean facilities.
Dow Jones awaits Trump’s stimulus package
The stock markets remain nervous after Trump failed to deliver his ‘dramatic’ stimulus package yesterday.
The president promised fiscal measures to help soften the economic impact of the virus. He even hinted at slashing pay-roll tax cut to zero for the rest of the year (though his advisors are against it). But no details have yet been revealed. Guillaume Tresca, a strategist at Credit Agricole said stocks won’t rebound until government fiscal plans are announced.
Despite the hopes for fiscal stimulus everywhere, we see significant downside risks … As long as uncertainties remain on the number of cases, and central banks’ actions and fiscal stimulus plans are not lifted, we see few reasons for a protracted and long-term rebound.
UK warns of ‘large and sharp’ economic hit
Early this morning, the Bank of England delivered an emergency interest rate cut. The base rate was slashed from 0.75% to 0.25%, back to its lowest level on record. Governor Mark Carney said the coronavirus impact would be ‘large and sharp’ but ‘temporary’.
There is no reason for it to be as bad as 2008 if we act as we have, and if there is that targeted support … This is a big package. It’s a big package…. And on top of it there are fiscal measures that are coming.
The European Central Bank (ECB) also made the comparison to 2008’s Great Recession, but said the worst could be avoided. President Christine Lagarde said the ECB would do everything in its power to avoid a repeat of 2008 and urged governments to do the same.
This article was edited by Samburaj Das.
Last modified: March 11, 2020 1:45 PM UTC