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The Dow Jones today could fall by more than 400 points as the coronavirus spreads in China.
Local officials report roughly 2,300 cases of Chinese citizens dealing with the virus. However, a nurse has reportedly told foreign media that the real figure is upwards of 90,000 cases. China has quarantined more than 50 million people in an effort to contain the virus. This morning, Wall Street firms have started issuing a string of downgrades due to exposure to the Chinese economy, which is already weakened by slower growth expectations for the year ahead.
I'll break down which stocks the coronavirus affects the most in just a bit.
First, here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
Now here are what I think will be the most important market events and stocks on Monday morning.
The Top Stock Market Stories for Monday
- Momentum signals broke down on Friday, and today a massive sell-off is underway. The Dow and S&P 500 are off 1.5% each as the number of cases of coronavirus rise around the world. At least 81 people have died in China, and the government has confirmed 2,862 cases. Leaders of the World Health Organization are traveling to China to meet with officials. Shares of Alibaba Group Holding Ltd. (NYSE: BABA) are off more than 6.5% in pre-market hours. Meanwhile, shares of Wynn Resorts Ltd. (NASDAQ: WYNN), Nike Inc. (NYSE: NKE), Walt Disney Co. (NYSE: DIS), and Apple Inc. (NASDAQ: AAPL) all fell this morning.
- Oil prices have plunged to a five-month low as economic worries rattle broader sentiment. Analysts expect that oil will remain lower for longer as a result of the outbreak. Meanwhile, China stocks are plunging in pre-market hours. So too are commodities like copper, aluminum, nickel, and iron ore. Investors are now flocking to safe-haven assets like gold and bonds to start the day.
- We're one week from the Iowa caucus, and Sen. Bernie Sanders (D-VT) has taken a lead in the polls. According to reports, Sanders has opened up a larger lead at the expense of rival Sen. Elizabeth Warren (D-MA), whose campaign has lost momentum in recent weeks. Sanders is also leading in New Hampshire. Wall Street has largely ignored the possibility of Sanders securing the nomination, but his campaign continues to gather momentum and support.
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Stocks to Watch Today: BA, SBUX, DHI
- Shares of Boeing Co. (NYSE: BA) fell another 1.5% after conflicting reports about a passenger jet crash in Afghanistan. A report first indicated that a plane owned by Ariana Afghan Airlines crashed on Monday. However, the company's CEO denied reports. It is also uncertain if the plane was made by Boeing. That said, the mere threat of additional bad news is weighing on the company as it continues to struggle with delays and investigations around its 737 Max jet. That said, the firm did complete the maiden voyage of its 777-x jet over the weekend.
- Starbucks Corp. (NASDAQ: SBUX) announced it was closing all of its stores in the Hubei province of China and suspending deliveries as the region continues to face the spread of coronavirus. Shares of SBUX are off 2.7% in pre-market hours.
- Finally, D.R. Horton Inc. (NYSE: DHI) shares were flat despite a rock-solid earnings report. The firm reported EPS of $1.16 per share for Q1. That figure easily beat expectations. In addition, the homebuilder experienced a 19% jump in new orders from the previous year. DHI capped off its positive report by increasing its sales forecast for the year ahead.
- Look for an earnings report from F5 Networks Inc. (NASDAQ: FFIV), Juniper Networks Inc. (NASDAQ: JNPR), Arconic Inc. (NASDAQ: ARNC), and J&J Snack Foods Corp. (NASDAQ: JJSF).
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.