Here are five things you must know for Monday, March 9:
1. -- Stock Futures Plunge, Bond Yields Tumble and Oil Prices Collapse
Stock futures tanked Monday, global stocks sank and bond yields were sharply lower as investors' fears about the spread of the coronavirus deepened and oil prices plunged as producers argued over how to cut production and lift prices as demand weakened.
Contracts tied to the Dow Jones Industrial Average plunged 1,300 points, S&P 500 futures tumbled 152 points, or 5%, and Nasdaq futures dropped 432 points before futures trading was suspended Monday under existing exchange rules.
With global coronavirus infections rising past 111,000 and the death toll from coronavirus Covid-19 just below 4,000, global investors can no longer ignore the virus' impact on the world economy, particularly now that U.S. health officials have warned its domestic spread is all but assured.
Compounding the global market selloff, which Bank of America estimated has destroyed about $9 trillion in equity value in just nine days, is a dramatic fall in government bond yields. The yield on the benchmark 10-year U.S. Treasury slumped to an all-time low of 0.318% overnight in one of the sharpest declines since the financial crisis. At last check, the yield was at 0.467%.
Investors bet Federal Reserve will need to slash rates by a further 75 basis points when it meets next week in Washington - following last week's emergency cut of 50 basis points - to inoculate the U.S. economy against Covid-19's destruction.
2. -- Oil Prices Sink as Saudi Arabia and Russia Argue Over Production Cuts
Prices for Brent crude, the international benchmark, were down 21% early Monday to $35.61 a barrel and West Texas Intermediate crude slumped 22% to $32.07 a barrel after negotiations between OPEC and Russia broke down and Saudi Arabia launched a price war and vowed to boost production to boost market share.
“Now that oil spark that really started the selling this morning, it wouldn’t in normal times be as big a deal but coming in as it does at this stage of the market cycle, it sparked real fear among investors and we are seeing wholesale panic across the market (Monday),” said Michael McCarthy of CMC Markets.
The sharp drop in oil prices Monday followed declines of more than 10% on Friday after OPEC talks collapsed.
OPEC leaders and non-member allies such as Russia failed to deepen a pact on production cuts but also allowed their current agreement, which takes 1.2 million barrels from the market each day, to expire.
Saudi Arabia, in what many analysts see as a tactic designed to punish Russia for its failure to support OPEC's proposal, has begun slashing prices just as demand weakens as economies slow amid the coronavirus crisis.
3. -- Coronavirus - The Latest
The number of confirmed global cases of the coronavirus has risen to 111,228, according to the Johns Hopkins Center for Systems Science and Engineering, and deaths sit at 3,892.
The U.S. has 564 cases of the virus and deaths have climbed to 22.
Federal and state officials in California were preparing Monday to receive thousands of people from a cruise ship that has been idling off the cost of San Francisco with at least 21 people aboard infected with the novel coronavirus, according to the Associated Press.
Columbia University will cancel classes on Monday and Tuesday because a person at the school is under quarantine from coronavirus exposure, the university's president said in an email Sunday. Classes will be conducted remotely from Wednesday until spring break begins Friday. Hofstra University on Long Island canceled classes this week when a student reported flu-like symptoms Sunday after attending a conference with a person who later tested positive for coronavirus, The New York Post reported.
The University of Washington said over the weekend that it was shutting down in-person classes and finals starting Monday, and Stanford University in Palo Alto, Calif., said classes would be conducted online where possible.
Italy has locked down the north of the country, including Milan - about 17 million people - as it attempts to stop the spread of the coronavirus.
Texas Sen. Ted Cruz said he would self-quarantine this week at his home in Texas because he interacted with a person at a political conference in suburban Washington who tested positive for the virus.
4. -- Stitch Fix Earnings Monday, Broadcom and Adobe Later This Week
Later in the week will see reports from Broadcom (AVGO) - Get Report, Adobe (ADBE) - Get Report, Oracle (ORCL) - Get Report, Dick's Sporting Goods (DKS) - Get Report, Gap (GPS) - Get Report, Slack Technologies (WORK) - Get Report and Ulta Beauty (ULTA) - Get Report.
The economic calendar in the U.S. Monday is bare.
5. -- FAA Set to Require Wire Fixes on Boeing 737 MAX Jets
The preliminary decision covers all of the nearly 800 MAX airliners produced so far.
The decision, if put in effect, could further delay the 737 MAX's return to the skies. The aircraft has been grounded for nearly a year following two deadly crashes.