The Dow plunged nearly 1,000 points this morning, making today's 3% loss the worst day for stocks in 2020. That could just be a small hiccup in the longest-running bull market of all time, but many fear it could be the start of the next stock market crash…
While we can't predict the future, we do know now isn't the time to panic. And if you're worried about what the coronavirus means for your money, you're in the right place.
Knowledge is power, and we're going to show you exactly why stocks are down right now.
Plus, we'll show you how to turn this into an opportunity – even if it's the start of a market crash…
Why Stocks Are Down Today
Simply put, stocks are down because the COVID-19 coronavirus is still spreading.
No longer is the virus limited to the Wuhan province in China, but it's spreading across the world now.
Over the weekend, Italy reported six deaths from the virus and is closing schools in hopes of stopping its spread. Austria is also canceling trains from Italy.
It's not limited to Europe, either.
At least 12 deaths have been reported in Iran, while South Korea is seeing hundreds of new cases.
The spread is serving a painful reminder to Wall Street that far from being under control, we're in the throes of a pandemic. We simply don't know when it will stop or if it can be stopped.
And Wall Street hates that kind of uncertainty.
You see, the virus is upending businesses across the world, disrupting supply chains and hurting productivity. That means lower revenue and lower profits, with no end in sight.
Apple Inc. (NASDAQ: AAPL) is the textbook case here. The stock had been on a tear, returning nearly 90% gains to investors over the last year thanks to its stellar business. But the stock has plunged over 7% in the last two weeks.
Apple relies on supply chains from China to produce its tech products, especially the iPhone. With the coronavirus hurting China's productivity and making global transit more difficult, investors know it will put a dent in Apple's profits.
Plus, bans on travel within China and consumer fears of catching the virus are hurting airlines the most. American Airlines Group Inc. (NASDAQ: AAL) is down 18% in the last two weeks.
And Carnival Corp. (NYSE: CCL) might be the biggest loser yet. One of Carnival's cruise ships is in quarantine after 174 passengers tested positive for the coronavirus. It's bad enough to have an entire ship out of commission, but fewer people are going to pay for a cruise when the disease is spreading so rapidly.
Carnival issued a warning to shareholders that its earnings will take a hit over the pandemic, and the stock is down over 25% in the last month, putting it firmly in correction territory.
That's the bad news.
The good news is we know the cause behind stocks dropping. This isn't a random sell-off or a sign of a bubble popping. Those are the kinds of causes that could ignite a market crash.
The market is repricing stocks based on the hit their revenue and earnings are taking from the pandemic. We simply don't know how long the pandemic will last or how bad it will get.
But knowing what's causing stocks to drop is actually the first step toward knowing what to do next.
Here are three ways to protect your portfolio and turn the coronavirus sell-off into profits…