2020-3-17 14:42 |
Coinspeaker
Dow Futures Open 700 Points Up on Tuesday after Trump’s Tweet about Airlines Support
On Monday, Dow Jones suffered its worst day after the “Black Friday” market crash of 1987 as fears of coronavirus continue to mount further. The Dow Jones crashed 12.9% i.e. nearly 3000 points closing at 20,188 levels. Just at the Monday opening, Dow Jones triggered a circuit breaker halting trading for 15 minutes. ‘
Over the last week, this is for the third time that Dow has triggered a circuit breaker. On the other hand, the S&P 500 also crashed 12% to 2386 levels hitting the December 2018 levels. Similarly, the Nasdaq Composite witnessed its worst day ever closing 12.3% lower at 6904 levels.
However, after the Monday bloodbath, the Dow Futures have given a strong opening on Tuesday morning surging nearly 800 points. Similarly, the Nasdaq 100 and S&P 500 futures also inched higher. All three futures contracts have hit the upper limits triggering a trading halt.
The recovery in the futures market came after President Donald Trump assured that his government will be supporting aviation and all other industries affected by the coronavirus.
The United States will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the Chinese Virus. We will be stronger than ever before!
— Donald J. Trump (@realDonaldTrump) March 16, 2020
Market Condition Is WorseningThe global markets are witnessing massive volatility over the last month with the uncertainty raised by the coronavirus spread. As said, Dow hit three lower circuits just over the last seven days. In a note to investors, Frank Cappelleri, executive director at Instinet, wrote:
“The markets are getting no break with yesterday’s historic Fed actions and COVID-19 dominating the world’s headlines. While the news continues to worsen and with the price action doing things we’ve only seen a handful of other times in the last century, it’s nearly impossible to keep things in perspective. “We can’t argue the facts, and we’re dealing with a much bigger issue than just the economy.”
Monday’s price crash came amidst President Trump saying that the outbreak can last up to August 2020. Besides, he also hinted that we could be heading for a possible economic recession ahead. Speaking to CNBC, BNY Mellon strategist Liz Young said:
“The market didn’t hear what it wanted to hear. I don’t think that it wanted to hear that this was going to last until July and August, and now the market does the math. If it lasts until July and August, that means we maybe have a contraction in the second quarter and the third quarter, and that means recession”.
On Monday, Dow ended nearly 31% lower from its all-time high above 29,000 levels. This massive crash has come just within a month’s time. On Sunday, the Fed had cut its interest rates to the lowest levels i.e. basically zero. In a corrective measure, the Fed has launched a $700 billion quantitative easing program.
“This, coupled with an important fiscal package, should help cushion the economic downside from the virus’ effect on economic activity. It’s going to be positive, but the market is at the mercy of the virus and at the mercy of whether the containment policies work,” said Quincy Krosby, chief market strategist at Prudential Financial.
Dow Futures Open 700 Points Up on Tuesday after Trump’s Tweet about Airlines Support
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