The pandemic declaration from the World Health Organization sent the market into territory we haven’t seen in 11 years, the dreaded “bear market.”
The Dow was down as much as 1600 points after the news broke mid-afternoon. While it made up a little ground before closing down 1464 points, it still qualified as a bear market, which occurs when the numbers drop 20% from their peak. The high came on February 12th. The S&P didn’t quite hit bear market territory but came close.
Another issue impacting the numbers negatively is the lack of a fiscal recovery plan. Donald Trump teased help was coming earlier in the week, but as Bloomberg points out “the Trump administration remained unable to detail any stimulus measures to combat the economic fallout.”
In the U.S., the Trump administration continues to promise “major” stimulus, but details remain uncertain. Democrats plan to urge the president to declare a national state of emergency. Markets are now growing worried that whatever does come will not have the ability to stave off a major blow to the world’s largest economy.
There’s plenty of pessimism among the experts. CNBC quotes Jerry Braakman, the chief investment officer of First American Trust:
“We can see the panic in the equity market… The big question for most people is, are we at the bottom yet? I think we’re only about halfway there.”
