AP Photo/Richard Drew
- US stock futures hit their 5% downward limit — triggering a temporary halt in trading — and overseas stocks, oil, bitcoin, and Treasury yields plunged Thursday the morning after the World Health Organization declared the novel coronavirus a pandemic.
- President Donald Trump gave a televised address in which he announced travel restrictions from Europe and pledged to help affected Americans and support small businesses.
- One analyst said, however, that Trump’s address “fell short of what investors were hoping for.”
- “Can we panic now?” another analyst asked.
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US stock futures hit their 5% downward limit — triggering a temporary halt in trading — and overseas equities, oil, bitcoin, and Treasury yields plunged on Thursday after the World Health Organization declared coronavirus a “pandemic” and President Donald Trump restricted travel from Europe to the US for 30 days starting on Friday in an effort to contain the outbreak.
Trump also pledged to provide financial aid to affected Americans and promised capital and liquidity for small businesses during the Wednesday press conference, but offered few details.
“The biggest source of disappointment on Wall Street was the lack of specific ways to support people and small- and medium-sized enterprises,” Jasper Lawler, head of research at London Capital Group, said in a morning note.
“Paid sick leave, free testing, and a solution for uninsured Americans were all missing,” he added.
Other analysts expressed similar sentiments.
“Donald Trump’s public address fell short of what investors were hoping for,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a morning note. They were expecting more as coronavirus threatens “one of the severest economic meltdowns we have experienced over the past decades,” she added.
Moreover, a flood of government funding might do little to alleviate the crisis, Ozkardeskaya argued.
“Proposed financial measures aim at boosting activity at a time when companies slow down operations to prevent further contagion,” she said. “Massive rate cuts have the effect of a sword cutting through the water.”
Coronavirus — which causes a disease called COVID-19 — has infected more than 126,000 people, killed at least 4,600, and spread to upwards of 100 countries. Italy has locked down its entire 60 million population, and the US has more than 1,000 confirmed cases.
The pandemic prompted New York to postpone its St. Patrick’s Day celebrations for the first time since 1762, and the National Basketball Association to suspend the rest of this season’s games.
“Can we panic now?” Michael Every, senior Asia-Pacific strategist at RaboResearch, asked in a morning note.
Here’s the market roundup as of 11:34 a.m. in London (7:34 a.m. in New York):
- European equities plunged, with Germany’s DAX down 5.9%, Britain’s FTSE 100 down 5.6%, and the Euro Stoxx 50 down 5.8%.
- Asian indexes closed lower. China’s Shanghai Composite fell 1.5%, South Korea’s KOSPI slumped 3.9%, Japan’s Nikkei dropped 4.4%, and Hong Kong’s Hang Seng fell 3.7%.
- US stocks are set to open lower. Futures underlying the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were trading close to the 5% downward limit.
- Oil prices fell, with West Texas Intermediate down 6% at $31 a barrel and Brent crude down 6.8% at $33.40.
- The benchmark 10-year Treasury yield slid to about 0.71%.
- Bitcoin slumped around 6% to about $7,400.