Dow Falls Almost 1,000 Points - Here’s What Wall Street’s Saying

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Stocks plummeted Wednesday. Wall Street is flagging some issues, but locating some opportunities. 

All three major U.S. indices were down considerably, with the S&P 500 down 4.1% and the Dow Jones Industrial Average down 4.4%. 

The 10 year treasury yield fell hard to 0.62%, from 0.68% Tuesday, as investors rushed for safety. 

JPMorgan  (JPM) - Get Report and Goldman Sachs  (GS) - Get Report fell 7.5% and 5.8%, respectively, as loan volumes could soon take a hit. 

The White House said 240,000 people in the U.S. could die from the coronavirus, which is causing a recession that will last as long as the virus lasts, regardless of monetary or fiscal stimulus. 

The ADP jobs report reflected the beginning of a recession, showing that there were 27,000 fewer payrolls in March compared to the same period last year. The ISM manufacturing activity data showed a contractionary reading of 49. These numbers will worsen in the near-term, Wall Street says.

Caterpillar  (CAT) - Get Report, one of the nation’s largest industrial companies, saw its share price fall 4%.   

The most important messages from Wall Street’s macro strategists are that parties that have done buying on a previous 2020 dip have already done so, but that opportunities within the broadly sold equity market oi exist. 

Tony Dwyer, Chief Market Strategist, Canaccord Genuity:

“The question we now must pose is who is the next buyer to keep the market moving higher? Let’s put aside the Coronavirus news and President Trump’s warning about the next few weekend simply focus on supply and demand of equities. Following the historic ramp higher last week into this past Monday: (1) Traders are taking profits on their busying last Monday’s low, (2) individual investors are stopping the spread by saying a homeland trying to figure out their economic future, (3) the quarterly-end pension and endowment fund rebalancing toward equities is over, and (4), most importantly, nearly every major companies preserving cash by suspending their share repurchase programs.” 

Nigel Green, Founder, The DeVere Group:

"The global economy is likely to be headed for recovery from a coronavirus-triggered downturn within six months – but only if mass testing is rolled out now and governments guarantee to support demand.”

James McCann, Senior Global Economist, Aberdeen Standard Investments:

"This week’s payroll data will not capture the full extent of the layoffs caused by the pandemic. Sadly we’re only at the start of this process.” 

Mark Haefele, Chief Investment Officer, Global Wealth Management, UBS: 

Oversold stocks: The COVID-19 sell-off in stocks has been broad-based and occasionally indiscriminate, causing heavy losses in even high-quality companies with strong balance sheets. We look to identify stocks in the US in the communication services and IT sectors that have suffered excessive price declines in the past few days relative to their still-solid fundamentals, and in high-quality stocks in Switzerland. In Europe, we think companies with exposure to emerging markets are in a better position to benefit from a recovery, given that economic activity in China is already starting to normalize. We favor global communication services, which can still perform well in a cyclical downturn and also stand to benefit from more people working from home and a rise in e-learning. For more ideas on positioning for a rebound, click here.” 

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