Where Stocks Closed Wednesday and What Top Wall Street Analysts Are Saying

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Stocks mostly rose Wednesday, but sentiment was held back by issues the government can’t solve. That’s the coronavirus-induced recession the U.S. has likely slipped into the beginning of.

The Nasdaq fell slightly into the red, while the S&P 500 gained just 1.33% after being up more than 3% earlier. The Dow Jones Industrial Average, led by a 30% increase in Boeing shares, rose 2.3%.

Congress passed a plan that adds more than $1,000 to each household in the U.S., $350 billion in loans and grants to small businesses, $50 billion in loans to airlines and $150 billion of relief to hospitals.

Wall Street sees that the stimulus — from both the broader federal government and the Federal Reserve — may keep households and businesses liquid for now. But the problem is that, if the virus lasts a long time, more stimulus will be needed and a recession will last just as long, creating massive uncertainty for markets trying to price in the length of a recession.

Here’s what top Wall Street analysts had to say:

Brad McMillan, Chief Investment Officer, Commonwealth Financial Network

"Monetary policy—think interest rates and bank regulation—can only do so much, however. What has been missing, until now, has been direct policy support (i.e., writing checks) for workers and businesses. Spending money, known as fiscal policy, is the province of Congress. What this package, and the Fed’s actions, will not do is prevent a significant short-term drop in the economy. The second quarter will be terrible, and the third quarter won’t be great either. What can be done—and what the package is designed to do—is allow people and companies to survive during that period, despite that slowdown. People will be able to pay their rent and buy food, first with the initial check and then with the expanded unemployment insurance. Companies will be able to pay their rent, other expenses, and, in many cases, their people.”

Burt White, Chief Investment Officer, LPL Financial

"The uncertainty around the scope of the outbreak makes forecasting economic growth difficult—especially before we see more data that reflects its impact.

Colin Moore, Global Chief Investment Officer, Columbia Threadneedle Investments

"We are grateful that global central banks are focusing on liquidity and not just interest rates, but the Fed and other central banks alone cannot solve this crisis.” 

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