Coronavirus fears send US stocks tumbling in worst week since financial crisis
- Almost US$3 trillion wiped from American equities as Dow drops to lowest level since June
- Fed chairman Jerome Powell says central bank is monitoring virus, hinting at possible rate cut
The spread of the coronavirus rattled global financial markets, sending US stocks to their worst week since the financial crisis more than a decade ago. Demand spiked for safe assets from Treasuries to the yen.
The S&P 500 plunged 11 per cent in the five days and the Dow Jones Industrial Average careered to the lowest level since June, wiping out almost US$3 trillion in value from American equities.
Treasuries surged, pushing yields on the 10- and 30-year notes to record lows during the period.
Oil plunged towards US$45 a barrel in its biggest weekly rout since 2008.
“Investors are selling stocks first and asking questions later,” Keith Lerner, SunTrust’s chief market strategist, wrote in a note. “We are seeing signs of pure liquidation. ‘Get me out at any cost’ seems to be the prevailing mood.
“There is little doubt the coronavirus will continue to weigh on the global economy, and the US will not be immune. There is much we do not know. However, it is also premature to suggest the base case for the US economy is recession.”
