Here are five things you must know for Monday, March 16:
1. -- Stocks Plunge as Fed's Emergency Rate Cut Can't Halt the Selloff
Stock futures hit "limit down" Monday and global stocks plummeted as investors weighed the deepening economic hit from the coronavirus pandemic and the Federal Reserve and other global central banks took emergency measures to prop up capital markets and liquidity.
Futures indicated the Dow Jones Industrial Average would fall 1,242 points at the open of trading Monday, the S&P 500 would decline 142 points and the Nasdaq would tumble 439 points.
The Fed slashed its benchmark lending rate by 1% on Sunday to a range of 0% to 0.25%, matching the record low last seen during the peak of the global financial crisis in 2008.
The central bank also said it would re-start its quantitative easing program, with at least $700 billion in new bond and mortgage-backed securities purchases over the coming weeks.
Several other central banks around the world followed suit, with the Bank of Japan ramping up its asset purchase program, the Reserve Bank of Australia providing further liquidity injections and the Bank of New Zealand cutting its benchmark rate by 75 basis points to 0.25%.
“Any way you look at it, it’s now almost certain that there will be a coronavirus-triggered recession as both global supply and demand are impacted," said Nigel Green, CEO and founder of deVere Group.
Stocks surged in late-day trading Friday after President Donald Trump declared a national emergency in an effort to fight the coronavirus outbreak.
The declaration will free up as much as $50 billion in financial resources to help Americans affected by the outbreak.
The Dow finished up 1,950 points, or 9.2%, to 23,151, the blue-chip index's biggest point gain ever. The S&P 500 rose 9.21% and the Nasdaq gained 9.34%.
2. -- Coronavirus - The Latest
The number of confirmed global cases of the coronavirus has risen to 169,387, according to the Johns Hopkins Center for Systems Science and Engineering, and deaths increased to 6,513.
The U.S. has 3,774 cases of the virus and deaths have climbed to 61.
New York City said it will limit all bars and restaurants to take-out and deliveries in attempt to slow the coronavirus. Nightclubs and movie theaters must also close. Similar measures will be taken in Los Angeles.
All New York City-areas schools, as well as all other school districts in downstate New York, will begin closing early this week.
“I’m very, very concerned that we see a rapid spread of this disease, and it’s time to take more dramatic measures,” Mayor Bill de Blasio said Sunday. “This is a decision I have taken with no joy and a lot of pain.”
The New York City school system is the nation’s largest with 1.1 million children. School will close until at least April 20.
Ohio and Illinois will close bars and prohibit dining in restaurants.
A clinical trial evaluating a vaccine designed to protect against the new coronavirus will begin Monday, the Associated Press reported, citing a government official.
Testing will begin with 45 young, healthy volunteers with different doses of shots co-developed by the National Institutes of Health, which is funding the trial, and Moderna (MRNA) - Get Report. It will take a year to 18 months to fully validate any potential vaccine, public health officials said.
The airline said it has flown 1 million fewer passengers during the first two weeks of March.
"The bad news is that it's getting worse," CEO Oscar Munoz and President Scott Kirby said in a message to the airline's employees. "We expect both the number of customers and revenue to decline sharply in the days and weeks ahead."
3. -- Biden and Sanders Disagree on How to Confront the Pandemic
Former Vice President Joe Biden and Vermont Sen. Bernie Sanders agreed in the Democratic debate Sunday that Donald Trump's response to the coronavirus pandemic was inadequate but disagreed on how they would handle the crisis.
Biden called for expanding drive-through testing, for the military to help set up emergency hospitals and to assist with recovery efforts, and warned that a federal financial bailout may be necessary to stabilize the economy.
Sanders argued that his signature Medicare-for-All proposal would allow the country to respond faster to a health crisis.
“One of the reasons that we are unprepared, and have been unprepared, is we don’t have a system. We’ve got thousands of private insurance plans,” Sanders said. “That is not a system that is prepared to provide health care to all people in a good year, without the epidemic.”
Biden said the coronavirus pandemic was the wrong time to try to implement an overhaul of the nation's healthcare system.
“This is a crisis,” Biden said. “We’re at war with a virus. It has nothing to do with copays or anything.”
4. -- Goldman Sachs Sees U.S. Growth Shrinking 5% in Second Quarter
Analysts at Goldman Sachs predicted the U.S. economy, the world's largest, would shrink 5% in the second quarter after zero gross domestic product growth in the first three months of 2020, reported Bloomberg, which cited a note issued from the firm on Sunday.
Goldman Sachs cut its full-year forecast to 0.4% growth from 1.2% on expectations for growth of 3% and 4% in the third and fourth quarters and strong gains in early 2021.
“The uncertainty around all of these numbers is much greater than normal,” the Goldman economists wrote, Bloomberg reported.
Consumers and businesses will continue to cut travel, entertainment and restaurant spending, while disruptions to the nation's supply chain will further limit growth, the analysts said.
U.S. Treasury Secretary Steven Mnuchin said earlier Sunday the coronavirus pandemic probably wouldn't cause a recession in the U.S.
5. -- Monday's Economic and Earnings Highlights
The economic calendar in the U.S. Monday includes the Empire State Manufacturing Index for March at 8:30 a.m. ET.
Earnings reports are expected Monday from Coupa Software (COUP) - Get Report, HealthEquity (HQY) - Get Report, Tencent Music Entertainment (TME) - Get Report, FuelCell Energy (FCEL) - Get Report and New Age Beverages (NBEV) - Get Report.
Later in the week reports are expected from FedEx (FDX) - Get Report, General Mills (GIS) - Get Report, Five Below (FIVE) - Get Report, Darden Restaurants (DRI) - Get Report, Lennar (LEN) - Get Report, Crowdstrike (CRWD) - Get Report and Tiffany (TIF) - Get Report.