Stocks fell sharply on Wednesday as the COVID-19 shutdown slams the economy. Dismal economic data and weak bank earnings fueled concerns over the coronavirus’ impact on the U.S. economy.
The Dow Jones Industrial Average dropped 530 points at the open, or 2.2%. The S&P 500 slid 2.3% while the Nasdaq Composite traded 1.9% lower.
Retail sales during the month of March plunged a record 8.7%, according to a report from the Commerce Department published Wednesday. That was the largest one-month decline since the department began tracking the series in 1992… “This points to a very severe recession because this is just the beginning of a series,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “The consumer’s not spending.”
President Donald Trump said Tuesday that he believes some states will be able to lift the strict social distancing measures that have strained their economies before the end of April. “The plans to reopen the country are close to being finalized,” Trump said at a press briefing on the virus in the Rose Garden. “The day will be very close because certain states as you know are in a much different condition and are in a much different place than other states. It’s going to be very very close. Maybe even before the date of May 1st,” he said.
New York Gov. Andrew Cuomo’s optimistic tone about the outbreak in his state, the epicenter of the pandemic in the United States, also boosted investor sentiment [on Tuesday].
MacDailyNews Take: It’s hardly a shock that the COVID-19 shutdown is slamming the economy. Amazingly, if you close many of the stores, retail sales plunge. Well, the rollercoaster continues – hang on, everybody!
Again, the sooner we can all get back to work, in relative safety*, the better.
*Nothing is perfect on this rock. We need both a functioning economy and COVID-19 mitigation to coexist as best as humanly possible. This is not an “either/or” issue, this is a “how do we do both the best we possibly can.” We need a nuanced pre-vaccine mitigation plan – social distancing, masks, work from home as much as possible, no handshakes, frequent hand washing, hand sanitizer everywhere, travel limits, etc. – for when this temporary lockdown ends, as it must, many months before a vaccine is available.