Shortly after President Trump began his address to the nation, enacting a full travel ban from European nations for the next 30 days, the markets started to get upset.
S&P 500, Nasdaq and Dow futures fall 4-4.5%
Both Brent and WTI futures down more than 6%
Nikkei 225 drops 4.5%, Australia’s benchmark slumped 5% to confirm bear market status
Main China stock indexes all fall at least 1%
Kospi, Hang Seng, Taiex slide 3% or more
Treasury 10-year yields decline 14 bps to 0.73%
AUD/USD falls 0.3%, EUR/USD jumps 0.4%
Malaysia, Korea, Philippine currencies all retreat 0.5%; Mexican peso tumbles more than 1%
Dow futures are down over 1000 points...
Japan's Nikkei 225 is down over 350 points...
Nasdaq futures are limit down...
S&P is close to its 2,601 limit down...
And for the cash open tomorrow:
7% limit down (RTH only) : 2546.50
13% limit down (RTH only) : 2382.00
20% limit down (RTH only) : 2190.00
10Y Treasury yields are down 15bps...
The Euro is strengthening against the dollar...
WTI Crude is collapsing, hitting a $30 handle
European Stoxx 50 futures are down 7.3%
It appears Trump did not offer enough detail and immediacy to appease the market's need for funds to stop the collapse. Additionally, the uncertainty over the impact on European supply chains is also weighing on markets.
The market is now demanding 90bps of rate-cuts for next week's FOMC...
Chris Martenson and John Rubino explain why the virus is the catalyst not the cause of the crash...
For years, Peak Prosperity has been raising a loud warning of the ‘Everything Bubble’ that the world’s central banks have blown in global asset prices.
Over that time, we’ve debated with hundreds of economic experts on what will be the trigger to “pop” this mania.
Well, now we’re finding out.
The economic damage being wrought worldwide by the coronavirus is the black swan the system never saw coming. Trade is being strangled, and the necessary productivity needed to support that massive increase in global debt that has been taken on over the past decade is just not there.
Bankruptcies are set to ripple across industries like wildfire. Mass layoffs will return with a vengeance. For certain industries — like travel, hospitality, and the shale oil drillers — this will be an extinction-level event for many players.
As ugly as the swift -20% drop in markets from from February’s highs has been, this is just the start of the reckoning, folks.
Additionally, As El-Erian notes, the NBA suspension is really bring the fear home...
News like this, as well as form @tomhanks (wishing him will) will fuel uncertainty, prompting people to disengage more from economic activities.— Mohamed A. El-Erian (@elerianm) March 12, 2020
My main worry is materializing:
The ECONOMICS OF FEAR will turbocharge the supply/demand destruction due to #CoronaVirus SUDDEN STOPS. pic.twitter.com/0JJA0SB6uZ