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Wall Street suffers worst day since 1987 as recession fears grow - business live Wall Street suffers worst day since 1987 as recession fears grow - business live
(32 minutes later)
Rolling coverage of the latest economic and financial news, as shares fall sharply again across the globeRolling coverage of the latest economic and financial news, as shares fall sharply again across the globe
The AAP newswire also predicts that Australia’s market will slide by around 4% (although there’s still time for that to change:
Wall Street’s Monday night rout will weigh on Asia-Pacific markets down when Tuesday’s trading session begins.
Australia’s ASX 200 index is expected to fall, having already tumbled almost 10% on Monday.
Kyle Rodda of IG writes:
The US Federal Reserve’s attempts to calm the markets hasn’t been an overwhelming sucesss.
Last night, the Fed surprised investors with a big emergency rate cut, and the promise to create another $700bn of asset purchases.
This attempt to prop up the markets has triggered fresh alarm on Wall Street. Investors are concerned that the Fed is itself panicking about the US economy (how bad are things really?), and anxious that monetary policy will not stave off a recession.
Washington Post columnist Brian Klaas points out that today’s crash was actually slightly worst than the original Black Monday in 2019:
Wall Street’s tumble came as European finance ministers pledged to do “whatever it takes” to stem the economic damage of coronavirus on European economies and ensure a rapid recovery.Wall Street’s tumble came as European finance ministers pledged to do “whatever it takes” to stem the economic damage of coronavirus on European economies and ensure a rapid recovery.
After a conference call of around four and a half hours, the 27 ministers issued a statement promising “a strong determination to do whatever it takes” - probably a deliberate echo of the former European Central Bank chief Mario Draghi’s 2012 pledge to preserve the single currency, which proved a turning point in the eurozone crisis.After a conference call of around four and a half hours, the 27 ministers issued a statement promising “a strong determination to do whatever it takes” - probably a deliberate echo of the former European Central Bank chief Mario Draghi’s 2012 pledge to preserve the single currency, which proved a turning point in the eurozone crisis.
But the absence of a far-reaching EU-wide stimulus plan is likely to disappoint centrist, socialist and green politicians, who had called for such a sweeping response to boost the economy as the world faces a far-reaching slowdown.But the absence of a far-reaching EU-wide stimulus plan is likely to disappoint centrist, socialist and green politicians, who had called for such a sweeping response to boost the economy as the world faces a far-reaching slowdown.
Mário Centeno, president of the 19-country Eurozone, said ministers stood ready to take further action as the crisis evolved.Mário Centeno, president of the 19-country Eurozone, said ministers stood ready to take further action as the crisis evolved.
Some instant reaction to today’s Wall Street tumble:Some instant reaction to today’s Wall Street tumble:
Wall Street’s late tumble came as Donald Trump gave a more serious assessment of the dangers of the coronavirus crisis.Wall Street’s late tumble came as Donald Trump gave a more serious assessment of the dangers of the coronavirus crisis.
As flagged earlier, the US president suggested it could take until July or August to get the outbreak under control.As flagged earlier, the US president suggested it could take until July or August to get the outbreak under control.
CNBC has the details:CNBC has the details:
Trump also spoke about the prospect of lockdowns in “certain areas” or “hot spots”, as the White House outlined its recommendations for Americans to avoid gatherings of 10 or more people, and to refrain from seating at bars, restaurants and food courts to stem the spread of the coronavirus.Trump also spoke about the prospect of lockdowns in “certain areas” or “hot spots”, as the White House outlined its recommendations for Americans to avoid gatherings of 10 or more people, and to refrain from seating at bars, restaurants and food courts to stem the spread of the coronavirus.
I think the Dow is now at its lowest level since February 2017, shortly after Donald Trump became US president:I think the Dow is now at its lowest level since February 2017, shortly after Donald Trump became US president:
This is the second time in three trading sessions that the Dow has suffered its worst fall since 1987.This is the second time in three trading sessions that the Dow has suffered its worst fall since 1987.
The index has now posted four serious plunges in March already, and has lost 20% of its value this month alone.The index has now posted four serious plunges in March already, and has lost 20% of its value this month alone.
Newsflash! Wall Street has just suffered its worst day since 1987.Newsflash! Wall Street has just suffered its worst day since 1987.
A late tumble in New York has seen the main indices plunge by 12%.A late tumble in New York has seen the main indices plunge by 12%.
The S&P 500 index has shed 324 points, or 11.98%, to 2,386 points.The S&P 500 index has shed 324 points, or 11.98%, to 2,386 points.
The Dow has tumbled by almost 3,000 points -- its biggest points fall ever - as it slumped by 13% to 20,186.The Dow has tumbled by almost 3,000 points -- its biggest points fall ever - as it slumped by 13% to 20,186.
This, the latest in a series of stomach-churning falls, is Wall Street’s worst day in over 30 years, as fears of a global downturn have accelerated sharply in recent days.This, the latest in a series of stomach-churning falls, is Wall Street’s worst day in over 30 years, as fears of a global downturn have accelerated sharply in recent days.
Donald Trump’s warning that the US could fall into recession has helped to push stocks lower.Donald Trump’s warning that the US could fall into recession has helped to push stocks lower.
Over in Washington, president Donald Tump has conceded that the US economy could fall into recession.Over in Washington, president Donald Tump has conceded that the US economy could fall into recession.
Trump is holding a media briefing at the White House now, with the US coronavirus task force.Trump is holding a media briefing at the White House now, with the US coronavirus task force.
Asked if the US economy is heading into recession, the president replied it “may be”, but that the important thing is to tackle the coronavirus. Once the virus “goes away”, the US will see a tremendous economic surge, he insisted.Asked if the US economy is heading into recession, the president replied it “may be”, but that the important thing is to tackle the coronavirus. Once the virus “goes away”, the US will see a tremendous economic surge, he insisted.
But, Trump also suggested that the worst of the virus outbreak may be over by July or August, or possibly later.But, Trump also suggested that the worst of the virus outbreak may be over by July or August, or possibly later.
US authorities are also tightening their guidelines, recommending avoiding social gatherings of more than 10 people over the next 15 days, to slow the virus’s spread.US authorities are also tightening their guidelines, recommending avoiding social gatherings of more than 10 people over the next 15 days, to slow the virus’s spread.
These guidelines also recommend that places with evidence of “community spread” of the virus should close bars, restaurants, food courts, gyms and other places where people congregate -- which will have a very severe impact on companies in those areas.These guidelines also recommend that places with evidence of “community spread” of the virus should close bars, restaurants, food courts, gyms and other places where people congregate -- which will have a very severe impact on companies in those areas.
Kristalina Georgieva, head of the IMF, has welcomed the G7 pledge:Kristalina Georgieva, head of the IMF, has welcomed the G7 pledge:
Earlier today, Georgieva said the Fund “stands ready” to use its $1 trillion lending capacity to help countries that are struggling with the economic impact of the coronavirus.Earlier today, Georgieva said the Fund “stands ready” to use its $1 trillion lending capacity to help countries that are struggling with the economic impact of the coronavirus.
Chris Giles of the Financial Times has put his finger on the problem with today’s G7 statement -- it’s a bit woolly (implying leaders haven’t achieved a major breakthrough).Chris Giles of the Financial Times has put his finger on the problem with today’s G7 statement -- it’s a bit woolly (implying leaders haven’t achieved a major breakthrough).
It might be wrong to say that the Federal Reserve’s latest emergency measures have failed. It’s more that they can’t, alone, address the threat Covid-19 poses to global health and the global economy.It might be wrong to say that the Federal Reserve’s latest emergency measures have failed. It’s more that they can’t, alone, address the threat Covid-19 poses to global health and the global economy.
As Solita Marcelli of UBS Global Wealth Management puts it (via Reuters):As Solita Marcelli of UBS Global Wealth Management puts it (via Reuters):
Goldman Sachs also dampened the mood on Wall Street todayGoldman Sachs also dampened the mood on Wall Street today
They predicted the US economy would stagnate in January-March, and then shrink dramatically - by 5% - in April-June. Serious, worrying stuff. But they also predict the economy would bounce back later in the year - meaning annual growth of 0.4% (down from 1.2% before.They predicted the US economy would stagnate in January-March, and then shrink dramatically - by 5% - in April-June. Serious, worrying stuff. But they also predict the economy would bounce back later in the year - meaning annual growth of 0.4% (down from 1.2% before.
Marketwatch has more details:Marketwatch has more details:
The G7’s combined statement has not lifted the mood on Wall Street.The G7’s combined statement has not lifted the mood on Wall Street.
Instead, the main indices are still down almost 10% in late trading - on track for another day of huge losses.Instead, the main indices are still down almost 10% in late trading - on track for another day of huge losses.
Dow: down 9.6% or 2,226 points at 20,959Dow: down 9.6% or 2,226 points at 20,959
S&P 500: down 8.6% or 235 points at 2,475S&P 500: down 8.6% or 235 points at 2,475
Boeing is having a desperately bad day, down 20% right now, as many of its customers slash services and start mothballing jets.Boeing is having a desperately bad day, down 20% right now, as many of its customers slash services and start mothballing jets.
House improvement group Home Depot are down 15%, with insurance group Travelers Companies losing 14%.House improvement group Home Depot are down 15%, with insurance group Travelers Companies losing 14%.
A review of UK company rules has opened the door for a raft of AGMs being delayed due to the coronavirus outbreak.A review of UK company rules has opened the door for a raft of AGMs being delayed due to the coronavirus outbreak.
It’s an important step that could safeguard the health of hundreds of shareholders, including elderly investors, as the UK government said it would no longer support mass gatherings.It’s an important step that could safeguard the health of hundreds of shareholders, including elderly investors, as the UK government said it would no longer support mass gatherings.
The business department has backed fresh guidance from the ICSA – known as the governance institute – which said this afternoon that companies have five options:The business department has backed fresh guidance from the ICSA – known as the governance institute – which said this afternoon that companies have five options:
Hold the AGM as planned, with appropriate modifications.Hold the AGM as planned, with appropriate modifications.
Delay convening the AGM, if notice has not yet been issued.Delay convening the AGM, if notice has not yet been issued.
Postpone the AGM, if permitted under the articles of association (Articles).Postpone the AGM, if permitted under the articles of association (Articles).
Adjourn the AGMAdjourn the AGM
Conduct a hybrid AGM, if permitted under the articlesConduct a hybrid AGM, if permitted under the articles
The guidance was provided with legal advice from law firm Slaughter and May, and has also been backed by other groups including accounting regulator the Financial Reporting Council, GC100, the Investment Association and the Quoted Companies Alliance.The guidance was provided with legal advice from law firm Slaughter and May, and has also been backed by other groups including accounting regulator the Financial Reporting Council, GC100, the Investment Association and the Quoted Companies Alliance.
But we’re expecting further updates tomorrow from the ICSA on this issue tomorrow, to reflect the government’s new guidance....But we’re expecting further updates tomorrow from the ICSA on this issue tomorrow, to reflect the government’s new guidance....
The leaders of the world’s biggest economies have pledged to work more closely together to tackle the coronavirus crisis.The leaders of the world’s biggest economies have pledged to work more closely together to tackle the coronavirus crisis.
Following their conference call today, G7 leaders have agreed to marshal “the full power of our governments” address Covid-19, which they say is “a major risk” for the world economy.Following their conference call today, G7 leaders have agreed to marshal “the full power of our governments” address Covid-19, which they say is “a major risk” for the world economy.
But there doesn’t seem to be a major new commitment, with a price tag attached, that might reassure the market.But there doesn’t seem to be a major new commitment, with a price tag attached, that might reassure the market.
The leaders of the US, UK, Canada, Germany, France, Italy and Japan have all agreed a four-point plan:The leaders of the US, UK, Canada, Germany, France, Italy and Japan have all agreed a four-point plan:
Coordinate on necessary public health measures to protect people at risk from COVID-19;Coordinate on necessary public health measures to protect people at risk from COVID-19;
Restore confidence, growth, and protect jobs;Restore confidence, growth, and protect jobs;
Support global trade and investment;Support global trade and investment;
Encourage science, research, and technology cooperation.Encourage science, research, and technology cooperation.
The G7 leaders say:The G7 leaders say:
The statement also contains a clear pledge to support companies and workers across the G7:The statement also contains a clear pledge to support companies and workers across the G7: