The stock market surged on Monday as investors invested in bargains after reassurances by central banks that they stood ready to counter the economic impact from the coronavirus following last week’s dramatic sell-off. Shares of Apple surged back from a two-year [4-month*] low to jump 6.3% and lift the S&P 500 more than any other company.
Bank of Japan Governor Haruhiko Kuroda said on Monday that Japan’s central bank would take necessary steps to stabilize financial markets. That followed a similar move by Fed Chair Jerome Powell last Friday.
Traders see a 100% chance of a 50 basis point rate cut at the Fed’s March meeting, according to CME Group’s FedWatch tool.
At 2:06 p.m. ET, the Dow Jones Industrial Average was up 2.98% at 26,167.45 points, while the S&P 500 surged 2.40% to 3,025.12. The Nasdaq Composite added 2.3% to 8,764.71.
“The sell-off was so fierce last week that you do have some buy-the-dip investors emerging,” said Brent Schutte, chief investment strategist, Northwestern Mutual Wealth Management Company.
MacDailyNews Take: Well, it sure is nice to see Apple shares surge. More, please. Hopefully, the COVID-19 situation improves quickly, so people can get back to work and the macroeconomy can regain its health, too, after this rather obvious overreaction. Some people watch too many disaster movies and have little or no idea about things like the annual Disease Burden of Influenza and therefore have difficulty putting things like COVID-19 into perspective.
*Thanks, to Apple 3.0’s Phillip Elmer-DeWitt for the correction!
It is easy to call something an overreaction with the benefit of hindsight. Better that than complacency over an epidemic or a storm warning.
It may be a bit early to talk about overreaction, in any case. It appears that the new virus is at large in the community, is somewhat more transmissible than seasonal flu, and perhaps as much as ten times more lethal. Until there is a vaccine, we could still see death counts that are quite high, with significant economic disruptions.
Fake news runs out of steam, market bounces back, the presidents of these media corporations should be jailed for inciting a national panic. 10,000 people have died of the flu this season already and we’re supposed to lose our minds over a handful of sickly seniors, but then again: “You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.” -Rahm Emanuel (Barack Obama’s Chief of Staff)
Nick, the preliminary indications are that Covid-19 is about ten times more lethal than seasonal flu. So, if the flu kills 10,000 people and as many people catch Covid-19, there will be 100,000 deaths. That isn’t fake news. It follows from the fact that 1.0 is higher than 0.1. The media did not make it up. There are also some indications that Covid-19 may spread more rapidly than flu in an unvaccinated population… and we are all unvaccinated. There are reasons to hope things won’t get as bad in the US as they did in Wuhan, but there are no guarantees.
You could blast them between the eyes with facts, and still it would be too subtle. I still think my cousin should be arrested for practicing medicine without a license and all she does is repost health conspiracy theories and astrological medicine. At least she’s not an anti-vaxer.
The far right deconstructionist on this forum are completely uninterested in facts, as has been demonstrated numerous times. They will say anything to further their cause and continue to attack important foundations of our country, especially the free press. A minority of the American electorate has twisted the politics of the U.S. for at least three decades, first becoming evident in the rankings of Newt Gingrich. And the far right has also been successful in gerrymanding control at the state level, as well.
It will take a powerful grassroots effort to pull this country back towards the moderate center and provide new hope to the rest of the world in which our allies feel alienated and other democracies are similarly sliding towards despotism. This is not hyperbole – historical collapses of democracy share many similarities to our current crisis. The veneer of democracy is thin and those currently in power who chant “fake news” and claim to be its staunchest supporters are, in fact, its largest threat.