Wall Street became a trading bloodbath yesterday as the Dow Jones records a historic drop of over 1,800 points. Investors and traders are eyeing for a quick recovery rally before the weekend.
Earlier this week, the Fed announced its forecasts for the U.S. economy, and it had traders shaking over at Wall Street.
The fear of a second wave has loomed over investors as the number of coronavirus cases increases in the U.S. in some states that are reopening from lockdowns.
— CNBC Now (@CNBCnow) June 11, 2020
Aside from the massive 6.9% plunge from the Dow, both the S&P 500 and Nasdaq 100 had its fair share of losses dropping over five percent.
However, the Dow Jones futures try to create a picture of mounting a comeback before the weekend. As of this writing, the Dow futures traded over 200 points.
Stock markets outside the U.S. reacted to the Dow Jones downfall
It looks like the negative sentiment caused by the U.S markets has taken a toll on the other markets.
Over in the Asia Pacific, markets continue to plunge over the negative sentiment brought about by both the coronavirus pandemic and the Fed announcement. South Korea’s Kospi is currently leading the plummet, dropping more than 2%.
Aside from the Asian markets, the European region has also reacted negatively as well. The Pan-European Stoxx 600 closed down by 4%, with autos plummetted at 6.9% as all sectors came into negative territory this week.
Should the U.S. maintain its course in reopening the economy?
Financial experts from all over the U.S. have been observing that the markets have been overly speculative lately. Investors and traders have witnessed unusual bankruptcy plays from some companies with their stock prices surging over 100%.
Andrew Slimmon of Morgan Stanley Investment Management told CNBC’s Squawk Box Asia that he would be shocked if the U.S. markets had a one-day sell-off and “that’s it.”
JJ Kinahan, chief market strategist at TD Ameritrade also expected that a market correction is long overdue as he added:
“As more states get back, the question becomes: Are they going to ramp up fast enough to please Wall Street? What you’re seeing is it’ll be hard to do that.”
However, despite the recent spikes in coronavirus cases all over the U.S., Treasury Secretary Mnuchin told CNBC that “we can’t shut down the economy again.”
The current coronavirus cases reported worldwide, per Johns Hopkins University, has now hit over the 7.5 million mark—with the U.S. recording over 2 million cases.
With all these news happening all over America, it will take a miracle for the Dow Jones to rally despite the overall negative sentiment that has been present with the other markets.
Featured image courtesy of Jack Moreh/StockVault