Traders work on the floor of the New York Stock Exchange in New York, March 20, 2020.Lucas Jackson/Reuters
The streak of unprecedented volatility has roiled Wall Street for weeks amid the global pandemic. The Dow is now lower than when President Donald Trump was inaugurated in 2017.
In a report from Moody’s Financial Services on Friday, analysts said that “a sharp contraction of the global economy, at least in the second quarter, appears imminent.”
“After being higher early on, U.S. stocks have turned lower in continued volatile action, as investors remain wary amid the spreading of the COVID-19 pandemic, while weighing the massive efforts worldwide to combat the economic impact of the outbreak,” the analyst team at Charles Shwab wrote in a commentary Friday. “Treasury yields are lower, and the U.S. dollar is losing ground, slowing its recent surge, while crude oil prices are trading to the downside and gold is higher.”
“Uncertainty will remain for at least several months as to how long it will take to contain the spread of the virus and how businesses and households will cope with the resulting financial losses,” the report added. “Financial market volatility is at levels that last occurred during the global financial crisis.”
The burden of the downturn will disproportionately hurt the transportation sector, the energy industry, hospitality, healthcare and consumer services, especially hotels and restaurants, according to Moody’s.
The coronavirus pandemic has plunged the Dow, S&P 500 and Nasdaq into bear market territory. In just weeks, all three indices tumbled roughly 30% from February highs.
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