COVID- 19 & Other Top News Affecting Advisors
Jan. 20–21: Centersfor Disease Control andPrevention says three U.S.
airports will start screeningfor coronavirus; the firstU.S. case is confirmed inWashington state.
Feb. 20: The Coronavirus Marketcrash begins; reports say COVID- 19cases are spiking at a Beijing hospital.
Feb. 24: The New York Stock Exchangestops trading in the late morning due totechnical issues, as its shares continueto trade on other exchanges. Clientsof Charles Schwab, Fidelity andTD Ameritrade complainabout problems in accessingaccounts online.
Feb. 27: Goldman Sachsrevises its S&P 500 earningsoutlook to 0 for 2020 becauseof its forecast for a “severedecline in Chinese economic activity,”lower demand for U.S. exports, supplychain disruptions and a slowdown inthe U.S. economy coupled with “elevated business uncertainty.”
March 2: Stock-trading app Robinhoodexperiences outage as the major stockindexes fall about 3%.
March 3: The Federal Reserveannounces a 0.50% emergency rate cutin response to the growing economicthreat from COVID- 19. “If this doesn’tforetell a global recession and furtherbig declines in equity prices, I don’tknow what would,” economist andmoney manager Gary Shilling says.
March 9: U.S. stocks drop over 7.5%
in the worst day on Wall Street since
the financial crisis, as crude oil prices
sink 20% on fears tied to the spreading
coronavirus. Treasury yields plummet,
and credit markets weaken in over-
night trading. “If the contagion lasts
for an extended period of time, the U.S.
economy could slip into recession and
the S&P 500 would fall to 2,460 (-18%),”
say Goldman Sachs strategists. Also,
Robinhood’s app crashes again.
March 13: PresidentDonald Trumpdeclares coronavirus anational emergency. Atravel ban on non-U.S.citizens traveling fromEurope goes into effect.
March 14: Trump says
that while he has
no plans to demote
Fed Chair Jerome
Powell he asserts he
has the right to do so.
March 15: The Fed cuts the benchmark interest rate by a full percentagepoint to nearly 0 and pledges a returnto quantitative easing via the purchaseof at least $700 billion in Treasuryand mortgage bonds. The central bankalso says banks can borrow from thediscount window for up to 90 days,and reserve requirement ratios havedropped to 0%.
At this time, some 163,000 people havebeen infected by COVID- 19 worldwideand over 6,000 have died, about half inChina. The U.S. has about 3,400 reported cases and 66 deaths.
The CDC issues guidance, stating that
“large events and mass gatherings” of
50 or more people should be canceled
or postponed for the next eight weeks
to reduce the spread of the coronavi-
rus. Such events include conferences,
parades, concerts, sporting events, wed-
dings, etc., and other types of assem-
blies that are planned “not only by
organizations and communities but also
March 16: The Dow crashes by close
to 13%; S&P 500 plummets 12%, its
worst day since 1987. NYSE halts trad-
ing for 15 minutes during the
day, the third time a circuit
breaker has been triggered
in the past week. Shilling
says the economic fall-
out from the coronavirus
pandemic “all but assures a
major global recession.”
March 16–20: Financial-servicesfirms move to temporarily closeoffices, branches and other facilities,as public health and executive ordersrequiring people to shelter in placebegin in California, New York andother areas. Most employees are askedto work remotely.
March 19: The recession that economists have been forecasting for the U.S.and the world has begun, according toanalysts at JPMorgan, Bank of Americaand Wells Fargo.
March 23: After announcing $700billion in asset purchases in the priorweek, the Fed removes limits on itsquantitative easing program. It alsosays it will continue to buy Treasuriesand mortgage-backed securities in“amounts needed to support smoothmarket functioning and effectivetransmission of monetary policy” andpurchase investment-grade securitiesin primary and secondary markets andthrough exchange-traded funds —which it has not done before.
Plus, the Fed says it will start lendingprograms for small businesses, consumers and large employers and a termasset-backed loan facility (TALF).