• Market Crumbs

Stocks Extend Their Decline As Reality Begins To Set In

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Well, CNBC's Markets in Turmoil failed to spark its typical boost to equities as stocks continued their selloff yesterday as fears over coronavirus continue to rattle investors' confidence.

The Dow Jones Industrial Average has now lost 6.59% over the last two days, its worst two-day loss since February 2018. The S&P 500 has lost 6.28% over the last two days, wiping out $1.737 trillion in market value, marking the worst two-day stretch since August 2015. Lastly, the Nasdaq has lost 6.38% over the last two days, marking the worst two-day stretch since June 2016.

One of the more obscure stats to take note of is the S&P 500 closed down more than 2.5% for consecutive sessions while above its 200-day moving average for the first time since 1938.

More than 64% of S&P 500 companies have entered a correction, meaning they're down at least 10% from their 52-week highs, while 25% of S&P 500 companies have entered a bear market, meaning they're down at least 20% from their 52-week highs.

Interestingly, U.S. President Donald Trump—who doesn't watch the stock market, is reportedly "furious" the markets have been selling off. The Washington Post reported he has warned aides against discussing the impact of coronavirus over fears that stocks may continue to fall.

Officials at the Center for Disease control appear to have concluded it's only a matter of when, not if, coronavirus spreads throughout the U.S.

"It's not so much a question of if this will happen anymore but rather more a question of exactly when this will happen and how many people in this country will have severe illness," Dr. Nancy Messonnier, the head of the National Center for Immunization and Respiratory Diseases at the Centers for Disease Control and Prevention, said.

Meanwhile Gilead Sciences has begun a clinical trial of its drug remdesivir on a patient hospitalized with COVID-19, marking the first clinical trial in the U.S. to find a treatment for coronavirus. The participant is an American who was quarantined on the Diamond Princess cruise ship in Japan and volunteered to participate in the study.

"We urgently need a safe and effective treatment for COVID-19. Although remdesivir has been administered to some patients with COVID-19, we do not have solid data to indicate it can improve clinical outcomes," said NIAID Director and U.S. Coronavirus Task Force member Anthony S. Fauci, M.D.

It's anyone's guess where markets go from here. Unlike other issues that have popped up during this bull market, a deadly virus sweeping the globe is not something that central bankers can easily overcome by printing money or cutting interest rates.

Leftover Crumbs

  • Two more CEOs head for the exits. The Walt Disney Company CEO Bob Iger is stepping down immediately, handing over the reigns to Bob Chapek, chairman of Disney parks, experiences and products. Iger will remain with Disney as executive chairman through the end of 2021. Iger said he wanted to focus on the creative side of the business now that the Fox acquisition has closed and Disney+ has launched. Salesforce also announced co-CEO Keith Block is stepping down, with company founder Marc Benioff assuming the role of CEO.

  • Impossible Foods is heading to Disney. The Walt Disney Company announced Impossible Foods' Impossible Burger will become the "preferred plant-based burger" at its U.S.-based theme parks and cruise ships. Disney will debut new Impossible Foods menu items this Friday at the California Adventure Food and Wine Festival. "We’re excited to add more items featuring the Impossible Burger to our menus, said John State, culinary director at Disneyland Resort. "We’re always looking for ways to bring more flavor, innovation and creativity to the Disney dining experience."

  • Will it actually help find something to watch? Netflix is debuting a feature that shows the top 10 movies and top 10 TV shows ranked by popularity among its users. Netflix has been testing the feature in the U.K. and Mexico, with plans to roll it out to additional countries. "This new row — complete with its own special design — will enable you to see what is most popular on Netflix in your country," Netflix said. "It will be updated every day and the position of the row will vary depending on how relevant the shows and films are to you."

  • Can an Apple watch lower stroke risk? Apple and Johnson & Johnson are teaming up to detect atrial fibrillation among people aged 65 or older through the use of an iPhone app and Apple watch. The study, which will be open to the more than 40 million people enrolled in Medicare, could help identify potential heart issues. "What we’re trying to do here is definitively answer that question: If you take wearable technology and couple it with an app, can you reduce the risk of a stroke or death?," said Paul Burton, vice president of medical affairs at the J&J subsidiary conducting the study.

  • They didn't hold back. The U.S. The National Transportation Safety Board (NTSB) lambasted Tesla for a fatal Autopilot crash that occurred in California in 2018. While blaming the design of Tesla's autonomous driving system, the NTSB also criticized the National Highway Traffic Safety Administration (NHTSA) for its "hands-off approach" to regulating the technology. NTSB Chairman Robert Sumwalt said "semiautonomous vehicles can lead drivers to be complacent, highly complacent, about their systems, and it also points out that smartphones manipulating them, can be so addictive, that people aren’t going to put them down."