Stock futures pointed significantly lower Thursday and the Dow Jones Industrial Average fell into a bear market after sinking 1,464 points on Wednesday as the coronavirus spreads and investors grow increasingly concerned about the economic fallout from the pandemic.
Donald Trump's address to the nation on Wednesday night about economic relief coming from the government failed to calm investors' frayed nerves, as did his ban on travel restrictions for most European countries.
Here is what Wall Street is saying about the rout and what they expect in the coming days, weeks and months.
- The tide rises, the tide falls, and so does the market," said Phil Bak, CEO of Exponential ETFs. "Bear markets test the fragility of markets, asset managers and investors - they are a necessary part of the cycle."
- “We continue to see the day-to-day flow of news really exhibiting itself in extreme volatility,” Jim Baird, chief investment officer at Plante Moran Financial Advisors, told The Wall Street Journal. “It’s a whole host of things that are really coming together to put investors in a pretty cautionary stance at this point.”
- “I want all retail investors to expect this environment will continue: sharp down days, sharp up days,” said Patrick Schaffer, global investment specialist at J.P. Morgan Private Bank. “This feeling of whiplash that people feel probably continues for some period of time.”
- “Markets reacted negatively to what was perceived as a solemn but confused speech (from Trump) that placed blame on other nations, omitted to focus on immediate actions to relieve the most affected individuals, and lacked in concrete fiscal and health measures to address the economic and financial impact of the virus,” said Gregory Daco, chief U.S. economist at Oxford Economics.
- “What you really need is confidence building,” Hani Redha, a London-based multiasset portfolio manager at PineBridge Investments, told The Wall Street Journal. “That comes from giving detailed communication to the market about what they’re seeing and doing to develop the sense there’s a comprehensive approach.”
- “The market judgment on that (Trump’s) announcement is that it’s too little too late. And while travel restrictions on people coming from Europe are good from a health point of view, from the point of view of the economy, it’s very, very bad news,” said Michael McCarthy of CMC Markets.
- While (Wednesday's) selloff was scary, the major indices closed right at Monday's lows, and that gives hope to bulls that another technical breakdown might still be avoided," said Gorilla Trades strategist Ken Berman. "While small-caps led the way lower and breadth was awful on Wall Street, long-dated Treasury yields edged higher while gold also fell ... meaning that safe-haven flows were weaker than on Monday, and that could support equities later on this week."
- “We can see the panic in the equity market,” Jerry Braakman, chief investment officer of First American Trust, told CNBC. “The big question for most people is, are we at the bottom yet? I think we’re only about halfway there.”
“I am just left speechless for Trump to say this is the most comprehensive plan,” Rob Carnell, chief Asia-Pacific economist at ING in Singapore, told Reuters. “Without all the additional testing and tracing and containment measures that certainly aren’t taking place in the United States, it’s just a PR stunt.”