In an emergency move Sunday, the Federal Reserve announced it is dropping its benchmark interest rate to zero and launching a new round of quantitative easing.
The QE program will entail $700 billion worth of asset purchases entailing Treasurys and mortgage-backed securities.
Markets responded negatively, with Dow futures pointing to a drop of 900 points when the market opens Monday morning.
The Dow Jones Industrial Average dropped 357.28 points, or more than 1%, to 25,409.36. The 30-stock Dow briefly fell more than 1,000 points then rallied into the close in a wild trading session characteristic of the week. The S&P 500 slid 0.8% to 2,954.22. The Nasdaq Composite closed flat at 8,567.37 but fell as much as 3.5% on the day.
Read MoreThe Dow Jones Industrial Average closed 1,031.61 points lower, or 3.56%, at 27,960.80. The S&P 500 slid 3.35% to 3,225.89 while the Nasdaq Composite closed 3.71% lower at 9,221.28. It was the Dow’s biggest point and percentage-point drop since February 2018. The Dow also gave up its gain for 2020 and is now down 2% for the year. The S&P 500 also had its worst day in two years and wiped out its year-to-date gain as well.
Read MoreThe major averages all slid more than 3% on Monday as the number of reported coronavirus cases outside of China rose.
If history is any indication stocks may be set for a relief rally on Tuesday.
According to Bespoke Investment Group, since March 2009 the S&P 500 has fallen more than 2% during a Monday session 18 other times, and that in 15 of the prior instances the index rose the following day, for an average gain of 1.02%.
A new study used Twitter posts to measure the frequency of minor and recurring floods — also known as nuisance flooding — along the United States’ East and Gulf Coasts.
The study found that this type of flooding is more common in 22 counties than official data would suggest. These counties include major cities such as New York, Miami and Boston, which combined have a population of more than 13 million people.
“Coastal floods and inundation are projected to produce some of the primary social impacts of climate change, imposing significant costs on communities around the world,” the report said.
Microsoft’s primacy and ubiquity in portfolios reflects the way it exemplifies nearly every characteristic that today’s market is rewarding richly.
Microsoft enjoys mid-30s percent profit margins, has repeatedly reloaded a $40 billion buyback plan and pays out more than $15 billion a year in dividends.
Microsoft is among the top 10 holdings in the most hedge funds, according to Goldman Sachs.
But has the acclaim for Microsoft become a bit extreme and uncomfortably unanimous.?
A Tesla executive said that cars initially scheduled for delivery in early February will be delayed due to the outbreak of the new coronavirus.
Tesla shares fell 17.18% Wednesday.
Tesla began rolling out Model 3 vehicles from its Shanghai Gigafactory to Chinese customers in January.
The S&P 500 has dropped 3% from its record high. Economically cyclical groups have been purged. Bonds are leading stock returns one month into the year.
Something was bound to come along and prompt a pullback. As it happened, the viral outbreak arrived to do the job.
Given that a perfectly routine decline following a strong multi-month rally could amount to 2% to 5%, a further drop of 2% to 3% would not compromise the broader uptrend.
Bond markets pricing in a high likelihood of another Fed rate cut around mid-year.
Economists expect growth in the fourth quarter to be about the same as the third quarter, at 2.1%, but growth could fall off going into the new year.
Fourth quarter gross domestic product data is expected Thursday at 8:30 a.m. ET.
Numbers should reflect less growth in spending in the fourth quarter, stubbornly soft business spending, and a surprise widening in the trade gap in December.
The central bank’s Federal Open Market Committee said Wednesday it will hold its benchmark funds rate in a range between 1.5% to 1.75%, where it has been since the latter part of last year.
The committee adjusted the language in its statement to reflect that policy is geared toward “inflation returning to the Committee’s symmetric 2 percent objective.”
The decision was unanimous. Several board members last year objected to the Fed’s rate cuts.
The Davos crowd doesn’t know where to allocate capital, says the vice chairman of British investment company Standard Life Aberdeen.
The current trend is to leave public markets and look to private investments.
Real estate, student accommodation and airports are all examples of what is in favor.
The Washington-based institution forecast in October a global growth rate of 3% for 2019 and of 3.4% for 2020.
The IMF has now revised down those forecasts to 2.9% and 3.3%, respectively.
The IMF is cautious about the state of the global economy going forward, in particular about further trade tensions.
The UK's economy grew by just 0.1% in the three months to November, according to the Office for National Statistics.
Growth was slightly stronger in September and October than previously thought, but fell 0.3% in November, dragging down the three-month figure.
The ONS said growth in the economy year-on-year was at its lowest since the spring of 2012.
Growth in construction was offset by a weakening service sector, while manufacturing was "lacklustre".
Read MoreThe investment community seems to be underestimating the potential fallout from rising tensions between the United States and Iran, CNBC’s Jim Cramer warned.
“When I see this endless buying for gold it makes me think for the first time people are just saying, ‘I’m really fearful,’” Cramer said.
Ahead of Monday’s open on Wall Street, Cramer asked, “Why aren’t the futures down more? They should be.”
Aerospace and defense stocks typically outperform the S&P 500 in the six months after Middle East crisis events.
Defense stocks have climbed and the broader market has sold off following last week’s killing of Iranian military leader Qasem Soleimani.
Huntington Ingalls and General Dynamics are the two best-performing defense stocks on average following major crisis events.
Stocks fell on Friday after the U.S. confirmed that an airstrike killed Iran’s top military commander, sending oil prices surging and ratcheting up geopolitical concerns.
The Dow Jones Industrial Average closed 233.92 points lower, or 0.6% at 28,634.88 and posted its biggest one-day loss since early December. The S&P 500 also had its worst day in a month, sliding 0.7% to 3,234.85. The Nasdaq Composite dropped 0.8% to 9,020.77. The Dow briefly dropped more than 360 points at the open. The major averages recovered some ground later in the session as oil prices came off their lows.
Read MoreStocks and oil tend to outperform defensive assets like gold and Treasurys in the months after major crisis events in the Middle East, according to an analysis by CNBC.
A U.S. airstrike killed a key Iranian leader, sending oil and gold prices higher.
Major U.S. stock indexes opened lower after the strike.
“All of the pillars of the stock market look a bit shaky to me,” he told “Trading Nation” Thursday. “While the economy will be okay in 2020, I think the stock market will have a rougher go of it.”
While he cites consumer spending, household balance sheets, jobs growth and a housing market as economic bright spots, he also sees slower than expected real GDP growth, a growing federal budget deficit and challenged corporate earnings pressuring the economy.
Read MoreThe pound has risen sharply over the past month as currency traders in the City of London bet that an election victory for Boris Johnson’s Conservatives would lift some of the intense political uncertainty facing Britain. Sterling jumped by more than two cents against the US dollar and the euro after exit polls indicated a Tory majority.
Read MoreThe British economy is on track for the weakest year outside a recession since the second world war, as political turmoil and Brexit uncertainty dragged down growth, a Guardian analysis reveals.
At the end of a turbulent year and following Boris Johnson’s election victory, surveys of business activity suggest economic growth in the final three months of 2019 has essentially stalled. The jobs market is showing signs of stress and public borrowing is steadily rising again after a decade of improvement.
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