Volatility continues to dominate the U.S. stock market, and the Dow Jones Industrial Average (DJIA) swung lower following Thursday’s opening bell.
Hopes for a quick containment period were dashed this morning as Italy extended its nationwide lockdown beyond the initial 3rd April date. Speaking to reporters, Italian prime minister Giuseppe Conte explained:
At the moment it is not sensible to say anything else… but it is obvious the measures we have taken – whether that be shutting down much of the country’s individual and business activities, or our actions regarding schools – can only be extended.
The country is now reporting 3,500 new cases every day. There are fears that America is now underestimating the challenge it faces.
The Dow opened to steep losses after U.S. stock futures swung in and out of negative territory overnight. If there’s any consolation, this is first time in five days that futures didn’t trigger the circuit breakers.
Here’s how the U.S. stock market’s major indices were faring on Thursday:
Italian doctors were hoping the spread would level off and begin declining after a week of lockdown. But that hasn’t happened. Dr. Giorgio Palù said he couldn’t predict when the curve will bend.
Yesterday we expected to have a change after almost 10 days of this new measure … but it’s still rising. So I don’t think we can make a prediction today.
Some 60 million Italians are on lockdown after the novel coronavirus took hold in the northern regions of the country. There are reports that numbers in the north are beginning to level off. But the daily new cases continue to rise.
The slow recovery in Italy sends a warning sign to the U.S. which is expected to follow Italy into social distancing measures. Bill Gates struck an optimistic tone, saying the U.S. could ‘open back up’ in 6-10 weeks.
If a country does a good job with testing and ‘shut down’ then within 6-10 weeks they should see very few cases and be able to open back up… With the right actions including the testing and social distancing (which I call ‘shut down’) within 2-3 months the rich countries should have avoided high levels of infection.
But the latest numbers out of Italy don’t look good. Things in China are more optimistic. The country reported zero new domestic cases for the first time this morning. Only 34 new cases were confirmed, all of them originated from overseas.
The U.S. stock market will likely remain volatile until the outbreak peaks and begins to trend downwards. Despite trillions of dollars of stimulus on the way, traders are at a loss trying to quantify the economic impact of this event.
Donald Trump ramped up the rhetoric last night, referring to himself as a ‘wartime president’ and deploying a military hospital to the New York region.
I view it as — in a sense — of wartime president… “I mean, that’s what we’re fighting. I mean, it’s a very tough situation here.
Last modified: March 19, 2020 1:53 PM UTC