The financial markets plunged into a state of abject panic this week, thanks to the novel coronavirus. As the rising number of COVID-19 cases fanned fears that a recession could be on the way, stocks fell at record speed . Investors also piled into government bonds, sending yields to new lows , a sign that the world's money guys are desperate for safe bets as the possibility of a true pandemic becomes real.
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Here's why: Most downturns are the result of what economists call "demand shocks." Some financial calamity befalls the country—gas prices spike, a stock bubble bursts, or housing prices go into freefall—or the Fed hikes interest rates too aggressively, and as a result, businesses and households cut back spending. When this happens, the government has plenty of ways to respond. Central bankers can cut interest rates, to encourage more borrowing and investment.
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Outbreak starts to look more like worldwide economic crisis - Business - Sarasota Herald-Tribune
More employers told their workers to stay home, and officials locked down neighborhoods and closed schools. The wide-ranging efforts to halt the spread of the illness threatened jobs, paychecks and profits.
The head of the World Health Organization announced that the risk of the virus spreading worldwide was “very high,” citing the “continued increase in the number of cases and the number of affected countries.”
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Stock markets around the world plunged again on Friday. On Wall Street, the Dow Jones index took yet another hit, closing down nearly 360 points. The index has dropped more than 14% since last week, making this the market’s worst week since 2008, during the global financial crisis.
Dr. Eugene D. Milener, 90; Hartwick Economics Chair | AllOTSEGO.com
Gene was born in Baltimore, Md., on May 3, 1930. He was the only child of Eugene II and Eleanor. The family moved to New York City.
Young Gene demonstrated excellence in his varied areas of interests. He was quarterback for his school’s football team. To pass the time while manning a booth at the local fair, he taught himself to be an expert juggler. He played first board on his school’s chess team. He was a camp coach for several summers north of New York City. He learned to sail single person sail boats. Above all, Gene excelled at running track.
Trump's top economic adviser confident coronavirus won't sink economy | TheHill
"The virus is not going to sink the American economy. What is or could sink the American economy is the socialism coming from our friends on the other side of the aisle," Kudlow told a crowd at the Conservative Political Action Conference (CPAC). "That's the biggest fear that I have today."
Kudlow asserted that economic data "have actually been quite good," pointing to figures on consumer spending. He described the stock market as "worried" by the virus but suggested that investors could have confidence in "buying the dip" in the market.
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Ex-Trump economist: Coronavirus could 'absolutely' spark global recession if not contained - CNN
Bloomberg - Are you a robot?
Major bank economist says the coronavirus market reaction 'boggles the mind' - MarketWatch
U.S. stocks SPX, -0.82% have entered correction territory in what S&P Dow Jones Indices says is the shortest time span in over 70 years. Futures prices imply a 75% chance of an interest-rate cut from the Federal Reserve within the next month.
The reaction doesn't make sense to Tom Porcelli, chief U.S. economist at RBC Capital Markets, which is one of the primary dealers of U.S. Treasury securities.
RBC's tracking of the U.S. economy finds it not just fine but better than average. Even the durable-goods orders report released on Thursday had some positive signs for capital expenditure going forward.
Economists now say the coronavirus could cause a recession
In just a matter of weeks, top economists and investment bank analysts have gone from expecting the coronavirus outbreak to have minimal impact on the U.S. economy to warning that an outright recession may be on the horizon.
What's happening: The spread of confirmed coronavirus cases in Europe, the Middle East and the U.S., and the speed at which they are being discovered has set the table for the outbreak to have a larger and much costlier impact.
Happening on Twitter
"The centre was not given any specific reasons why the laboratory was closed for rectification. [We have submitted]… https://t.co/7QXVjDhHvg Nectar_Gan (from Hong Kong) Fri Feb 28 17:57:38 +0000 2020
Here the reasons why the coronavirus has the stock market plunging https://t.co/t3dkPhLqSf Slate Sat Feb 29 00:19:24 +0000 2020
.@SteveHiltonx: "No one should buy the pundits' lazy consensus that Bernie is a populist, like Trump. He's not, and… https://t.co/vC8hGl4ID6 NextRevFNC (from Los Angeles, CA) Mon Feb 24 03:36:06 +0000 2020
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