The Dow Jones Industrial Average (DJIA) crashed deeper into bear market territory on Monday. The U.S. stock market plunged at the opening bell, triggering circuit breakers to halt trading.
The drop comes as New York prepares to shut down schools, bars, and restaurants. The financial capital of the world now has 329 cases of the novel coronavirus – just shy of the number in Wuhan when the city went on lockdown.
Former FDA Commissioner Scott Gottlieb urged the city to take action.
If we have a Wuhan-style outbreak in New York City, that’s going to overwhelm the system. They need to be building surge capacity right now in anticipation of that possibility.
Trading on the U.S. stock market was halted temporarily on Monday after the S&P 500 slammed into circuit breakers for the third time in a week. The selloff only accelerated after trading resumed.
All signs point to a disastrous stock market session, despite the Federal Reserve’s second emergency rate cut.
New York state now has more confirmed Covid-19 cases than anywhere else in America. A total of 729 have tested positive in the state, with 329 in New York City.
Wuhan was locked down after 500 global confirmed cases.
Asked if New York City was heading for the same drastic measures, mayor Bill de Blasio said:
Every option is on the table in a crisis. We’ve never seen anything like this.
In a passionate New York Times op-ed, Governor Andrew Cuomo called on Trump to deploy the armed services.
Our best hope is to utilize the Army Corps of Engineers to leverage its expertise, equipment and people power to retrofit and equip existing facilities — like military bases or college dormitories — to serve as temporary medical centers.
New York might be on the verge of a breakout, but it is ill-prepared. At this point in the Chinese timeline, the Wuhan government announced plans to build a dedicated hospital to treat the infected.
Former FDA Commissioner Scott Gottlieb did the math for New York:
Remember, Wuhan was the size of New York City. At the peak of that epidemic, they hospitalized about 20,000 people. 10,000 were in serious or critical condition. 2,000 were intubated. To give you a basis of comparison, New York state — the entire state — has 50,000 hospital beds and about 3,000 critical-care beds.
Governor Cuomo said New York still isn’t testing enough people and reminded Donald Trump that America has fewer beds than other regions battling the outbreak.
Our country as a whole has fewer than one million staffed hospital beds, fewer proportionately than China, South Korea or Italy.
Traders are now anticipating a full-scale shut down of the U.S. economy and widespread quarantines. Retail stores, travel companies, bars, restaurants, and local businesses will likely take the biggest hit.
The Federal Reserve tried to get out in front of the panic with an emergency announcement last night. The slashed interest rates to zero and launched $700 billion in quantitative easing.
It didn’t have the desired effect.
The futures market immediately tumbled and triggered circuit breakers. A top U.S. banking regulator during the 2008 financial crisis, Sheila Bair, explains why the Fed’s actions didn’t work:
They are throwing money in the wrong place… Lowering interest rates to zero doesn’t help if businesses can’t pay their loans back and they don’t have cash flow … We need to get help out there, especially to small businesses and people already losing their jobs.
European stocks also plunged in Monday’s session with the UK’s FTSE 100 revisiting 8-year lows.
Last modified: March 16, 2020 1:51 PM UTC