'Spiraling Virus Fears Are Causing Financial Carnage' diff viewer (2/3)

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Spiraling Virus Fears Are Causing Financial Carnage	Spiraling Virus Fears Are Causing Financial Carnage
2020-03-21 02:14:24 UTC	2020-06-02 20:24:47 UTC (2 months later)
There is nothing investors hate more than uncertainty. Right now, that is all there is.	There is nothing investors hate more than uncertainty. Right now, that is all there is.
Uncertainty about the severity and duration of the coronavirus outbreak, ripping around the world at something like light speed. Uncertainty about how the global economy will fare as factories, airports, stores, schools, entire cities shut down. Uncertainty about the ability of governments to contain the disease and the power of central banks to counter its economic fallout. Uncertainty about how long all this uncertainty will last.	Uncertainty about the severity and duration of the coronavirus outbreak, ripping around the world at something like light speed. Uncertainty about how the global economy will fare as factories, airports, stores, schools, entire cities shut down. Uncertainty about the ability of governments to contain the disease and the power of central banks to counter its economic fallout. Uncertainty about how long all this uncertainty will last.
The spiraling fears have caused financial carnage. The S&P 500 index has dropped 12 percent since Feb. 19, the sharpest dive in nine years. The plunge has obliterated roughly $3 trillion in wealth.	The spiraling fears have caused financial carnage. The S&P 500 index has dropped 12 percent since Feb. 19, the sharpest dive in nine years. The plunge has obliterated roughly $3 trillion in wealth.
In the past two weeks, even decent days have been tinted with a scary aura. On Friday afternoon, the S&P was poised to lose more than 2 percent, before the index pared its losses amid a blizzard of buying in the moments before the closing bell. (A similar last-minute surge the previous Friday made an awful week a little less bad.) For all the heartburn-inducing turmoil, the S&P ended this week essentially flat.	In the past two weeks, even decent days have been tinted with a scary aura. On Friday afternoon, the S&P was poised to lose more than 2 percent, before the index pared its losses amid a blizzard of buying in the moments before the closing bell. (A similar last-minute surge the previous Friday made an awful week a little less bad.) For all the heartburn-inducing turmoil, the S&P ended this week essentially flat.
Market records have been falling like dominoes. The Dow Jones industrial average, for example, had both its biggest single-day point decline (1,191 on Feb. 27) and its biggest gain (1,294 on Monday).	Market records have been falling like dominoes. The Dow Jones industrial average, for example, had both its biggest single-day point decline (1,191 on Feb. 27) and its biggest gain (1,294 on Monday).
Behind the turbulence are confusion and anxiety, and a sense that the modern world is in an unprecedented situation. “There’s no playbook for this,” said Derek Devens, a portfolio manager at the fund company Neuberger Berman. “That’s been really hard for people to digest.”	Behind the turbulence are confusion and anxiety, and a sense that the modern world is in an unprecedented situation. “There’s no playbook for this,” said Derek Devens, a portfolio manager at the fund company Neuberger Berman. “That’s been really hard for people to digest.”
The financial mayhem extends beyond the stock market.	The financial mayhem extends beyond the stock market.
Many companies are essentially frozen in place, unable to predict how the coronavirus might affect their businesses. Their immediate task is to figure out how to keep operating while making sure their employees are safe. In Silicon Valley, Apple and Twitter told people to work from home. In New York, Bank of America and JPMorgan Chase dispatched small parts of their trading desks to the suburbs so they would have backup crews to keep business running in an emergency.	Many companies are essentially frozen in place, unable to predict how the coronavirus might affect their businesses. Their immediate task is to figure out how to keep operating while making sure their employees are safe. In Silicon Valley, Apple and Twitter told people to work from home. In New York, Bank of America and JPMorgan Chase dispatched small parts of their trading desks to the suburbs so they would have backup crews to keep business running in an emergency.
With the global economy now poised to shrink, demand for oil is declining, causing the price of crude to crater. As investors flee from risk, gold prices have soared. The safest assets out there — bonds issued by the U.S. government — have shot higher in price. For the first time, the interest rates on 10-year Treasury note shriveled this week to less than 1 percent, falling on Friday to a record low of 0.71 percent.	With the global economy now poised to shrink, demand for oil is declining, causing the price of crude to crater. As investors flee from risk, gold prices have soared. The safest assets out there — bonds issued by the U.S. government — have shot higher in price. For the first time, the interest rates on 10-year Treasury note shriveled this week to less than 1 percent, falling on Friday to a record low of 0.71 percent.
A sudden global disease outbreak isn’t the kind of risk that many market players were trained to react to. Few investors are epidemiologists. The most sophisticated financial models and the fastest-moving trading algorithms are flying blind.	A sudden global disease outbreak isn’t the kind of risk that many market players were trained to react to. Few investors are epidemiologists. The most sophisticated financial models and the fastest-moving trading algorithms are flying blind.
“This you can’t even put a model on, because it’s not really something that we’ve seen before,” said Michael Feroli, the chief U.S. economist at JPMorgan.	“This you can’t even put a model on, because it’s not really something that we’ve seen before,” said Michael Feroli, the chief U.S. economist at JPMorgan.
In financial circles, there’s a term for such events: a black swan. They are rare but ominous. And they are impossible to anticipate.	In financial circles, there’s a term for such events: a black swan. They are rare but ominous. And they are impossible to anticipate.
The Sept. 11, 2001, terrorist attacks were a calamitous example, a so-called exogenous shock for markets, having originated outside the financial system itself. More often, market turmoil comes from within: the mortgage crisis and collapse of Lehman Brothers in 2008; tremors in the junk bond market in 1987 and 1989; and the demise of the giant Long-Term Capital Management hedge fund in 1998.	The Sept. 11, 2001, terrorist attacks were a calamitous example, a so-called exogenous shock for markets, having originated outside the financial system itself. More often, market turmoil comes from within: the mortgage crisis and collapse of Lehman Brothers in 2008; tremors in the junk bond market in 1987 and 1989; and the demise of the giant Long-Term Capital Management hedge fund in 1998.
In 2001, no one knew if the attacks on the World Trade Center and the Pentagon were merely the first in a series of strikes. With the spread of the coronavirus, no one knows how deadly and widespread it will prove to be, or how disruptive to people’s lives, or its impact on the domestic and global economy.	In 2001, no one knew if the attacks on the World Trade Center and the Pentagon were merely the first in a series of strikes. With the spread of the coronavirus, no one knows how deadly and widespread it will prove to be, or how disruptive to people’s lives, or its impact on the domestic and global economy.
Uncertainty breeds fear, and fear breeds panic.	Uncertainty breeds fear, and fear breeds panic.
“Investors went from thinking everything was flawless to hopeless,” said Howard Marks, a co-chairman of the alternative asset manager Oaktree Capital Management. “People are thinking, ‘I’ll be stepping over bodies on Park Avenue, like the Black Plague.’ That’s panic.”	“Investors went from thinking everything was flawless to hopeless,” said Howard Marks, a co-chairman of the alternative asset manager Oaktree Capital Management. “People are thinking, ‘I’ll be stepping over bodies on Park Avenue, like the Black Plague.’ That’s panic.”
Fears can be self-fulfilling. On Thursday, the venture capital firm Sequoia Capital directed the young tech companies in which it has invested to “question every assumption about your business” and consider taking pre-emptive action to prepare for a downturn, such as curtailing spending and taking a hard look at the size of their workforces. Sequoia called the coronavirus “the black swan of 2020.”	Fears can be self-fulfilling. On Thursday, the venture capital firm Sequoia Capital directed the young tech companies in which it has invested to “question every assumption about your business” and consider taking pre-emptive action to prepare for a downturn, such as curtailing spending and taking a hard look at the size of their workforces. Sequoia called the coronavirus “the black swan of 2020.”
In some respects, exogenous shocks sow even more fear and uncertainty than traditional financial crises, because investors have no experience to draw on. Monetary policy, and the central banks that wield it, can be effective at battling financial upheavals, as the Federal Reserve managed to do during the 2008 crisis, but it has no effect on viruses.	In some respects, exogenous shocks sow even more fear and uncertainty than traditional financial crises, because investors have no experience to draw on. Monetary policy, and the central banks that wield it, can be effective at battling financial upheavals, as the Federal Reserve managed to do during the 2008 crisis, but it has no effect on viruses.
What is especially unnerving to investors now is the apparent impotence of institutions that would seem to have the greatest chances of soothing markets.	What is especially unnerving to investors now is the apparent impotence of institutions that would seem to have the greatest chances of soothing markets.
When the Fed announced an emergency decision on Tuesday to slash benchmark interest rates by half a percentage point, stock markets rallied for about 15 minutes before resuming their downward spiral.	When the Fed announced an emergency decision on Tuesday to slash benchmark interest rates by half a percentage point, stock markets rallied for about 15 minutes before resuming their downward spiral.
One reason: Investors feared that the Fed — whose monetary policy has been a key to the stock market’s long rally — is running out of options to stimulate the economy. Eric Rosengren, the president of the Federal Reserve Bank of Boston, said Friday that the central bank might need to weigh new measures to counter a downturn, including buying a wider array of assets.	One reason: Investors feared that the Fed — whose monetary policy has been a key to the stock market’s long rally — is running out of options to stimulate the economy. Eric Rosengren, the president of the Federal Reserve Bank of Boston, said Friday that the central bank might need to weigh new measures to counter a downturn, including buying a wider array of assets.
The reality is that nobody knows quite how to calm markets, much less how to contain the virus outbreak. Modest bits of upbeat news — the Labor Department announced on Friday morning that the American economy had added 273,000 jobs in February — haven’t done the trick.	The reality is that nobody knows quite how to calm markets, much less how to contain the virus outbreak. Modest bits of upbeat news — the Labor Department announced on Friday morning that the American economy had added 273,000 jobs in February — haven’t done the trick.
	Updated June 1, 2020
	Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.
	States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.
	Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
	Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
	If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
	More than 40 million people — the equivalent of 1 in 4 U.S. workers — have filed for unemployment benefits since the pandemic took hold. One in five who were working in February reported losing a job or being furloughed in March or the beginning of April, data from a Federal Reserve survey released on May 14 showed, and that pain was highly concentrated among low earners. Fully 39 percent of former workers living in a household earning $40,000 or less lost work, compared with 13 percent in those making more than $100,000, a Fed official said.
	Yes, but make sure you keep six feet of distance between you and people who don’t live in your home. Even if you just hang out in a park, rather than go for a jog or a walk, getting some fresh air, and hopefully sunshine, is a good idea.
	Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.
	The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.
	If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
	If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.
	Charity Navigator, which evaluates charities using a numbers-based system, has a running list of nonprofits working in communities affected by the outbreak. You can give blood through the American Red Cross, and World Central Kitchen has stepped in to distribute meals in major cities.
“Today you had this great jobs report,” said Jay Foreman, the chief executive of the toy company Basic Fun. “It’s going to be exactly the opposite next month. I can’t imagine anybody is hiring anybody this month, unless they’re selling hand sanitizer.”	“Today you had this great jobs report,” said Jay Foreman, the chief executive of the toy company Basic Fun. “It’s going to be exactly the opposite next month. I can’t imagine anybody is hiring anybody this month, unless they’re selling hand sanitizer.”
He said the coronavirus crisis was forcing him to lay off 18 of the company’s 175 workers — 10 in the United States, six in Hong Kong and two in Europe.	He said the coronavirus crisis was forcing him to lay off 18 of the company’s 175 workers — 10 in the United States, six in Hong Kong and two in Europe.
Nor were investors soothed by President Trump’s signing of a bill to provide $8.3 billion to fight the coronavirus or cheerful TV assurances from Larry Kudlow, the top White House economic adviser.	Nor were investors soothed by President Trump’s signing of a bill to provide $8.3 billion to fight the coronavirus or cheerful TV assurances from Larry Kudlow, the top White House economic adviser.