Markets Hammered by COVID-19
CBJ — International stock markets continued their dramatic downward spiral to end the week, with concerns about the coronavirus and its potential for pandemic status, which is scaring investors off and resulting in many of them opting to place their investments in more traditionally conservative alternatives such as bonds.
Toronto’s S&P/TSX composite index was down as much as 821 points but on a bright note manged to claw back a fair amount of the earlier losses to close the week down 455 points at 16,263.
In New York, the Dow Jones industrial average was off 357 points at 25,409. The S&P 500 index was down 24 points at 2,954, while the Nasdaq composite was up almost a single point to finish at 8,567. The downturn has been the worst for the markets in terms of one-day losses since the global economic downturn in 2008.
Governments and medical professionals will be keeping a close eye on COVID-19 and how it spreads over the next week to 10 days.
The U.S. Federal Reserve had recently pushed back against calls for rate cuts, but that changed on Friday when Chairman Jerome Powell released a statement warning that while the fundamentals of the U.S. economy “remain strong,” the outbreak “poses evolving risks to economic activity” and that the Fed would “act as appropriate” to support the economy, which just recorded a strong fourth quarter.
The Bank of Canada will decide on Wednesday whether to alter its trendsetting overnight rate.