Both the Dow and the S & P 500 have had their worst day since February 2018, while the NASDAQ has seen its biggest one-day decline since August 2011.
This week the Dow and the S & P 500 are also likely to have their worst performance since 2008. As of Thursdays close, the Dow has fallen more than 11% so far this week, while the S & P 500 has fallen 10.8%.
The Centers for Disease Control and Prevention (CDC) confirmed Wednesday that the first public health emergency case of unknown origin was found in Northern California, indicating that there may be community transmission of the disease. The Centers for Disease Control and Prevention said the patient had no travel history or exposure to public health emergencies. Californias governor, Nathan Newson, said Thursday the state is monitoring 8400 people for public health emergencies.
we are extremely cautious in the short term, said Tom Hailin, global investment strategist at ascent private capital management. No one seems to be a real expert on public health emergencies. We have never seen such a situation in our investment career.
On Wednesday, President trump tried to ease concerns about the outbreak. He told a White House news conference that the United States is in a very good position to face the coming public health crisis. Trump also appointed Vice President burns to head the U.S. response to the new coronavirus, saying the market should recover soon.
Concerns about how the public health emergency will affect corporate profits and global economic growth have left us stocks in turmoil all week. South Korea has confirmed a total of more than 1700 cases, and Italy has more than 600. The outbreak also led several companies to warn about their earnings.
Microsoft said Wednesday it would not be able to meet revenue expectations for key departments. The company said its supply chain returned to normal operations at a slower than expected rate, leading the technology giant to cut its PC sales forecast. In the last quarter, personal computers accounted for 36% of Microsofts revenue. Microsoft shares fell 7.1%. PayPal also warned about its future.
Willie Delwiche, Bairds investment strategist, said: with the selling going on this week, we have seen some signs that investor caution has increased. Investors are getting rid of an overly optimistic attitude, but there is still no sign that fear trumps complacency. The bottom is usually a process disrupted by emergencies, and the stabilization of the width index will be an encouraging sign that this process is in progress.
It will take four months for US stocks to rebound after all previous plummets
Since the Second World War, the U.S. stock market has plummeted 26 times (excluding the February 27 plunge), falling 13.7% on average each time, and it has taken an average of four months to rebound since then.
The latest big drop occurred from September to December 2018. In the autumn of 2018, the S & P 500 index repeatedly fluctuated in the adjustment range. Currently, the index has closed below the current big drop threshold of 3047.53, which is the fastest drop of 10% from the record high.