Wall Street's roller coaster week continues: March 13, 2020

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12:54 p.m. ET, March 13, 2020

Volatility is a sign that investors don't know what to do

From CNN Business' Anneken Tappe

It's been yet another wild week on Wall Street.

The day-to-day volatility is a sign that investors don’t know what to do,” said David Donabedian, chief investment officer of CIBC Private Wealth Management.

Until the news about the coronavirus pandemic turns a corner, "a sustained recovery in is unlikely," Donabedian added.

Economic data will undoubtedly paint an ugly picture for the months to come, but the economy and the markets should improve in the second half of this year, he said. 

The economy was in good shape before the health crisis began, so it should get back on track faster,” Donabedian added.

This is a good reminder for stock investors: long-term returns come with short-term trade offs. The selloffs may offer opportunities to snap up high-quality companies at reduced prices.

 “Our goal is to take advantage of market emotion to upgrade the long-term growth potential of our portfolios,” Donabedian said.

12:06 p.m. ET, March 13, 2020

Stocks have given back a bunch of their gains

From CNN Business' Anneken Tappe

US stocks are still in the green at midday but have given back a lot of their prior gains.

Could the market finish in the red again today?

The S&P 500 is up 1.7% at midday, while the Dow is up 380 points, or 1.8%. At its best, the Dow was up more than 1,300 points.

The Nasdaq Composite us up 1.7%.

Wall Street remains on track for its worst week since October 2008.

11:24 a.m. ET, March 13, 2020

Here's what the stock market selloff means for the economy

From CNN Business' Anneken Tappe

Stocks are on track for their worst week since the financial crisis in 2008, as investors grow increasingly worried about the economic impact of the coronavirus pandemic.

Looking at the data, "recessions accompanied four of nine major selloffs since the 1970s," said Citi economist Andrew Hollenhorst. While the risk of a recession in the United States is elevated, he believes it's still below 50%.

The stock selloff reflects the expected downturn in economic data in coming months. Financial conditions are also tightening, Hollenhorst said, which alone could lead to worsening economic data. But people are beginning to exercise social distancing and stay at home when they can. Market participants are carefully watching consumer behavior, the backbone of the US economy.

Spending on things like travel is likely to be substantially slower, Hollenhorst said, but as Americans stock up on food, personal care and medical supplies, other categories of consumption might actually rise.

11:18 a.m. ET, March 13, 2020

Apple has reopened all 42 stores in China

From CNN Business' Pamela Boykoff

Apple (AAPL) has reopened all 42 of its stores in China that were closed because of coronavirus, an Apple spokesperson confirmed.

The company had closed all stores as of February 1 “out of an abundance of caution” over the coronavirus outbreak. The company said the stores have been gradually reopening over the past few weeks.

11:26 a.m. ET, March 13, 2020

Airline and cruise stocks are rebounding

From CNN Business' Jordan Valinsky

Shares of US airlines are moving higher in tandem with the broader market rally.

Airline stocks have gotten wrecked this week in light of new travel restrictions between the US and Europe and falling demand because of the corona virus.

  • Delta (DAL) is climbed nearly 9%
  • United (UAL) is up 3%
  • American (AAL) rose 6%
  • Southwest (LUV) jumped 7%

Cruise stocks are also staging a rally:

  • Carnival (CCL) is up 7%
  • Norwegian (NCLH) sailed 11% higher

11:12 a.m. ET, March 13, 2020

NY Fed speeds up efforts to fix the financial system's plumbing

From CNN Business' Matt Egan

The Federal Reserve is accelerating aggressive steps designed to unclog the pipes of the financial system.

The New York Fed announced it will buy $37 billion of Treasuries on Friday alone, speeding up purchases that were planned throughout the month.

And unlike previous months when the Fed was focused on buying very short-term Treasuries, the central bank said it will also buy long-term debt on Friday including 20- and 30-year Treasuries.

"These purchases are intended to address highly unusual disruptions in the market for Treasury securities associated with the coronavirus outbreak," the NY Fed statement said.

The Treasury market, long viewed as the safest part of the financial system, malfunctioned on Thursday. Liquidity dried up, alarming investors.

The NY Fed tried to get the pipes moving again by offering to pump $1.5 trillion into the financial system through overnight repo operations.

The Fed also promised to start purchasing a range of Treasuries -- and Friday's announcement shows it's making good on that promise.

Analysts say the fact that the Fed is now buying long-term Treasuries, not just T-bills, effectively marks a return to the 2008 crisis-era bond buying program known as quantitative easing, or QE.

10:34 a.m. ET, March 13, 2020

Consumer sentiment slips to lowest level since October

From CNN Business' Anneken Tappe

Preliminary March consumer sentiment slipped to its lowest level since October. That's the bad news. The good news: Sentiment wasn't as bad as expected.

The University of Michigan consumer sentiment survey index for this month came in at 95.9 points, down from 100.9 in February, but better than the 95 points expected by economists.

Consumer sentiment fell because of the coronavirus outbreak and the sharp selloffs across global financial markets.

"Importantly, the initial response to the pandemic has not generated the type of economic panic among consumers that was present in the runup to the Great Recession," said Richard Curtin, chief economist at the University of Michigan's survey of consumers.

Still the data suggests further declines in the survey index as the virus spreads, Curtin said.

"Perhaps the most important factor limiting consumers' initial reactions is that the pandemic is widely regarded as a temporary event," he added.

The final reading of March consumer sentiment data is due on March 27 at 10 am ET.

9:52 a.m. ET, March 13, 2020

Germany to the rescue?

From CNN Business' Matt Egan

It's no surprise to see global markets recouping some of their epic losses from the past week.

Friday morning's rally reflects a rebound from extremely oversold levels and bargain-hunting among investors in beaten-down stocks. It comes after the US stock market's darkest day since 1987. In fact, it was the Dow's fifth-worst day since the index was created in 1896.

And market sentiment is being boosted by extraordinary steps taken by global central banks. The New York Federal Reserve offered Thursday to inject $1.5 trillion into the financial system in a bid to halt the panic.

But don't overlook the importance of Germany's promising to spend whatever it takes to fight the economic fallout from the coronavirus pandemic.

German Finance Minister Olaf Scholz said there will be no limit to the money available and the thrifty country may even take on additional debt, according to Bloomberg News. That would be a big step for a country normally averse to borrowing.

"German FinMin Scholz unleashes the REAL bazooka today...in a shocking FISCAL 'whatever it takes' moment," Charlie McElligott of Nomura wrote in a report Friday.

10:02 a.m. ET, March 13, 2020

Stocks bounce back after entering bear market

From CNN Business' Anneken Tappe

US stocks bounced back from their worst day since “Black Monday” in 1987 on Friday.

Wall Street entered a bear market Thursday, ending an 11-year bull market run.

Stocks rallied at the open, gaining sharply in the first minutes of trading.