Despite the effort of Wall Street to maintain a positive outlook in the Dow Jones, pre-market moves today have wiped out last Friday’s gains.
Last week, the Dow Jones experienced its worst drop since March, and today’s pre-market action shows that investors and traders are getting cautious.
Steve Burns, the founder of NewTraderU.com, tweeted to his followers, signaling a drop in Dow Jones futures.
Dow futures start out trading with a drop of 300 points tonight. 📉
— Steve Burns (@SJosephBurns) June 14, 2020
Hours after he warned his followers of the initial drop, Dow Jones futures collapsed further to more than 800 points to start the week. The early morning drop in the futures also suggested that investors are fearing over a coronavirus second wave.
Dow Jones extends losing streak as analysts are pessimistic
With the recent movements from the Dow Jones and the U.S. markets, it looks like some analysts are now banking into the markets doing another drop as sentiment worsens not only in the U.S. but also in the whole world.
Ed Yardeni, president and chief investment strategist at Yardeni Research said in a note yesterday, per CNBC:
“Now that reopening is happening, there’s fear of suboptimal results: less social distancing triggering a second wave of the virus, followed by another round of lockdowns.”
Vital Knowlege founder Adam Crisafulli also said in a note on Sunday that the COVID-19 deterioration in certain states will stay an overhang for the market.
In addition, reports are also coming in that states in the reopening process are reporting an influx in daily coronavirus cases—Alabama, Florida, and California to name a few.
As per CNN, coronavirus cases in China have emerged once again, bringing its number of cases to 79 in Beijing injecting fear over the global markets.
The medical system in the U.S. at risk doctor warns
In a recent CNBC interview, William Schaffner of the Vanderbilt University School of Medicine thinks that “the second wave has begun.”
In addition, the U.S. doctor also observed that a lot of people are not practicing social distancing. He also mentioned that other countries are making wearing of masks mandatory.
The U.S. markets already had its surprises for the past couple of days, with rising stock prices from companies that announced their bankruptcy.
Furthermore, there might be a possibility of fewer market outliers like Genius Brands due to the fear of a looming second wave.
The Dow Jones may be in further jeopardy if the U.S. does not find a way to contain the coronavirus compared to the other countries that are responding swiftly to deploy the necessary measures.
Featured image courtesy of Tumisu/Pixabay