The Dow Jones Industrial Average lost more than 2,000 points this morning despite the U.S. Federal Reserve cutting interest rates to zero.
The central bank also introduced a quantitative easing program worth $700 billion. Read for more on how stocks are reacting to the coronavirus news today.
We'll start with the numbers from Friday for the Dow, S&P 500, and Nasdaq:
Index
Previous Close
Point Change
Percentage Change
Dow Jones
23,185.62
+1,985.00
+9.36
S&P 500
2,711.02
+230.38
+9.29
Nasdaq
7,874.88
+673.07
+9.35
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
This morning, markets are selling off despite news that the Federal Reserve has introduced a $700 billion quantitative easing program to address the impact of coronavirus. The SPDR S&P 500 ETF Trust (NYSE: SPY) is off nearly 9%, and bond markets are effectively frozen. Virtually any company seeking money in the public markets is trying to cover negative cash flow, which is a huge problem that markets do not like. The U.S. government and the Fed will likely continue to explore ways to boost liquidity and extend loans to businesses while markets are in a free fall. The International Monetary Fund has said it will also mobilize about $1 trillion in lending to help stave off the virus.
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The coronavirus continues to spread across Europe, the Middle East, and the United States. Iran announced that its death toll hit 853, with another 129 deaths over the last 24 hours. In the United States, political leaders are aggressively stepping up actions to encourage social distancing. States across the country are closing restaurants and retail locations, news that could bring those industries to their knees. Look for the government to aggressively seek ways to dedicate capital to these industries to support workers.
Meanwhile, oil prices remain in a free fall thanks to the ongoing tensions between Saudi Arabia and Russia. According to BP Plc. (NYSE: BP), demand for oil could be negative in 2020, a sentiment that has crude falling more than 9% in pre-market hours. Both Saudi Arabia and Russia have been engaged in a price war after OPEC failed to reach an agreement to curb production. Look for crude to fall below $30 in the week ahead.
Stocks to Watch Today: BA, RCL, CCL, NCLH, AAPL
Cruise companies continue to see their stocks plunge. Royal Caribbean Cruises Ltd. (NYSE: RCL), Carnival Corp. (NYSE: CCL), and Norwegian Cruise Line Holdings Ltd. (NASDAQ: NCLH) are falling after the companies announced they will temporarily halt operations due to the coronavirus outbreak.
Shares of Boeing Co. (NYSE: BA) are still falling as investors react to news that it is facing a possible credit downgrade from Fitch Ratings. The airline giant has been assigned "Credit watch - negative," which will impact prices dramatically. But keep in mind that Boeing is not the only company that faces this problem. We still have downgrades to junk status on the horizon for a lot of companies.
Shares of Apple Inc. (NASDAQ: AAPL) are back under pressure again after the company announced it will shutter all of its retail stores for the next two weeks to attempt to contain the coronavirus. That said, it will not shutter the 42 stores in China, where the virus has been declining in recent weeks.
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.