Plus, the Trump administration is seeking a third coronavirus stimulus package, the WHO warns that the virus can in some cases survive in the air, and Cisco said that there have been 5.5 billion meeting minutes for its Webex video conferencing platform since the start of the month.
Stocks were higher to start Tuesday with the Dow up 520 points, or 2.58%, at the time of writing. The S&P 500 was up 4%, while the Nasdaq was up 4.3%.
Stocks swung wildly this morning with each of the three major indexes up for the day after having fallen earlier in the session. The Dow dipped below 20,000 for the first time since February 2017 after the open before rallying higher. Overnight, Dow futures met their “limit up” level, trading 5% above their previous close following the market’s worst day since 1987’s “Black Monday” before rolling over. “A bear market does not preclude rallies,” said Eleanor Creagh, market strategist at Saxo Capital Markets. “The biggest rallies can be in bear markets – erratic swings are exacerbated by the present high-volatility regime and strained liquidity conditions. With VIX remaining significantly above the long-term equilibrium, alarm bells are still sounding and traders should be wary of relief rallies.”
Goldman Sachs and Morgan Stanley economists joined the call on Wall Street to declare that the coronavirus has triggered a global recession, just a day after President Trump conceded that the economic slump in the U.S. alone is set to be “a bad one.” Morgan Stanley says a global recession is now its “base case” with growth expected to fall to 0.9% this year, while Goldman Sachs says growth will weaken to 1.25%. Both Morgan Stanley and Goldman Sachs anticipate a rebound in the second half of the year, but warn that risk remains of greater economic pain. While the Federal Reserve and central banks around the world have taken aggressive steps to loosen monetary policy, most governments have been slow in responding and are only now crafting fiscal aid packages that could still to pacify a worried market. “This time will be worse than the global recession of 2001. While the policy response will provide downside protection, the underlying damage from both COVID-19’s impact and tighter financial conditions will deliver a material shock to the global economy,” Morgan Stanley’s economists said.
The Trump administration is seeking an $850 billion economic stimulus bill, making it the third coronavirus response package. The White House’s proposal could include around $50 billion in aid to the battered airline industry, a payroll tax cut that has been resisted by Congress, and emergency funds to citizens. “Americans need cash now,” Treasury Secretary Steven Mnuchin said during a White House press briefing. “I mean now in the next two weeks.” The new proposal is also expected to include $400 billion in steps taken by the executive branch, including a delay of the tax deadline and relief for student loan payments, in addition to the legislation passed by the House last week that included expanded sick leave and financial support for virus testing. Meanwhile, the Fed said today that it is moving to help companies get short-term funding, announcing a special credit facility to purchase corporate paper from issuers that have been having a difficult time finding buyers on the open market. “This is a crucial market for basically short-term borrowing by companies, and if you don’t get this short-term borrowing, you can’t get payments out, you can’t pay your employees, you can’t pay your customers,” said Randal Kroszner, a former Fed governor. “If this freezes up, it’s a real problem.”
Cases of COVID-19 surged to at least 5,145 in the U.S. overnight, while global cases now top more than 183,000. The number of cases in New York state rose to at least 1,374, making it the state with the most cases in the U.S., with 19% of those with the virus needing hospitalization. Infectious disease specialist Michael Osterholm said this morning that the coronavirus will be around for “many, many months,” and that the country needs to figure out a path forward with the world still months away from rolling out a vaccine. “We have to continue to consider what it means to die from this virus. It’s a very, very difficult and tragic situation. We also have to have a conversation about how we’re going to live with it. We have to figure that out,” Osterholm said. “Do we envision an America that for the next 18 months will be in complete lockdown?” Elsewhere, the World Health Organization is considering “airborne precautions” for medical staff after a new study showed that COVID-19 can survive in the air in some settings. The WHO also urged Europe to dramatically increase its efforts towards tackling the spread of the coronavirus there as the continent has become the epicenter of the outbreak outside of China with one-third of globally reported cases now stemming from the region. “Every country, with no exceptions, need to take their boldest actions to stop or slow down the virus threat,” said Hans Kluge, regional director for Europe at WHO. “Boldest action should include community action: Thinking that this does not concern me is not an option… There is, quite simply, a new reality.”
And Cisco CEO Chuck Robbins said this morning that the company’s video conferencing platform, Webex, has seen a surge in user activity as companies send workers home to work remotely due to the coronavirus pandemic. “In the first 11 business days of March, we’ve had 5.5 billion meeting minutes,” Robbins said. “Yesterday we held 3.2 million meetings globally on Webex, and that doesn’t include one on ones. Those are multi-individual meetings.”
Stocks We’re Watching
OpGen Inc (NASDAQ: OPGN): Nano-cap OpGen’s stock rocketed as much as 186.6% yesterday after the company announced that the company it has agreed to merge with, Curetis, has begun offering a CE-IVD-certified real-time PCR test kit for COVID-19. OpGen Chairman and CEO Evan Jones said that the company commends Curetis “for swiftly bringing this important product to market in a time of greatest need. As COVID-19 spreads across the glove, rapid testing technologies will be critical to the containment and ultimate treatment of the outbreak in Europe and beyond.”