How COVID-19 Affects The Stock Market Indexes
COVID-19 has affected health, professions, and education worldwide. But what many are oblivious about is its effect on stock market indexes.
Last February 2020, the World Health Organization (WHO) declared Coronavirus as a global-level threat. The sectors that have considerably high shares of international activity, such as restaurants and cinemas, are not as crowded as they used to due to the virus. That results in structural changes in the global economy, which means that the economic effects brought by the pandemic can lead to a worldwide financial crisis.
How Much Have Stock Market Indexes Declined
Ever since the latest financial crisis in 2008, the entire world has experienced yet another week of plunging stocks last February 2020. The whole month has been rough for markets, and it finally ended with some of the worst records in history. This predicament was caused by the impact of the increasing cases of Coronavirus patients on the economy. The ultimate partner in this crisis is finally here.
Standard & Poor’s 500
For 11 years, the S&P 500 has not met circumstances as terrible as they are last February. As a matter of fact, the performance is listed as the third-worst in February ever since 1960. In accordance with the data collected from Yahoo Finance, S&P lost 8.41% at that time.
By February 27, the stock market index dropped a total of 137.63 by 4:00 p.m. ET, which in percentage, is about 4.42%, leaving them with 2,978.76 points. After almost two hours, S&P futures (ES=F) were down 0.4%. In total, they fell above the 10% rate for that day when compared to the recent highs. Based on Deutsche Bank Securities, that resulted in the fastest correction ever recorded for the S&P 500 back then.
To start the next day, the main pre-market happened at 7:10 a.m. ET. For the S&P 500 futures, they are down 0.96%, which equates to 28.50. By 9:30 a.m. ET, the main market moved, and they are left with 2,894.03 credits after subtracting roughly 84.73 or 2.84%. As per 10:20 a.m. ET, S&P 500 (^GSPC) is down by more than 3%. By noon ET, they began to recover losses as their total accumulated points rise to 2,917.40. Finally, they closed the week at 2,954.22, down 11.2% from the 3,327.41 points in the previous week.
Dow Jones Industrial Average
Around these times, there were more than 82,000 confirmed cases and 2,800 deaths related to COVID-19 globally. In California, more than 8,400 individuals are suspected to carry the virus and have been under surveillance. Get the best sex doll here.
As a result of the growing cases, Dow drops approximately 1,190.95 points or 4.42% percent. It has overthrown the current worst record since October 2008. Shortly after 6:00 p.m. ET on Thursday, Dow futures (YM=F) were down 0.3%. For the main pre-market on Friday, they lost yet another 266 points or 1.04%, leaving them with 25,286.
After nearly two hours, Mexico reported their first case of Coronavirus, which in return, sent the markets in a deeper correction. A total of 793 or 3.08% were erased, resulting in 24,973.64. Dow (^DJI) shed 1000 points more by 10:20 a.m. ET but have regained 676.94 by noon ET. The Dow Jones Industrial Average capped the week at 25,409.36, down 12.4% from 28,992.41 last week.
Tracing back to 1972, NASDAQ fell over 6%, which was the lowest record as of the present They came close this February and ended up in the fifth-lowest rank. Nasdaq (^IXIC) lost 414.29 or 4.16% of the points on Thursday, 4:00 p.m. ET. On that evening, Nasdaq futures (NQ=F) were down 0.3%.
The stock futures by 7:10 a.m. have been reduced by 76.50 or 0.91%, resulting in 8,566.48 points. As of market open, 4.61% or 414.29 were withheld, and by 10:20 a.m. ET, Dow (^DJI) lost another 1000 points before stemming the losses. The NASDAQ ended the week at 8,567.37, which stays flat with the 0.89 difference. It is, in fact, down10.5% from the 9,576.59 points last week.
The cost of crude oil per barrel has decreased due to the increasing supply and limited demand. The prices have dropped on February 27 by 2.39 or 4.90% to $46.34 a barrel. When the next day came, the cost was further reduced to $45.80% per barrel, which amounts to about $1.29 or 2.74% loss. After then, it dropped to $45.09, then $44.94 from 9:30 a.m. and noon ET. The month then concluded as Crude oil (CL=F) rose to $45.07 by adding the $2.02 or 4.29%.
Even the rates for gold have been affected by the financial crisis caused by the Coronavirus. A day before the month of February ends, the price per ounce was reduced to 1,641.50, which indicated a 0.10% decrease. When the pre-market started to move by 7:10 a.m. ET, it was priced at $1,630.80 per ounce, denoting an $11.70 or 0.71% reduction. Afterward, it just keeps on plummeting. By 9:30 a.m. ET, it was for $1,626 per ounce, then $1,593.70 by noon ET, and closed off for $1,579.20 per ounce, losing $63.30 or 3.85%.
Treasury Yield 10 Years
Due to the dropping points of stock markets, investors moved their assets to the safety of bonds. However, the treasury yields continue to set falling records, to the point that it was reported as the biggest February drop since 1986. On February 27, 4:00 p.m. ET, the 10-year Treasury (^TNX) dropped by 0.84% or 0.0110 to 1.2990. By the next day, it was down by 0.1360 to 1.1630 during noon ET. To conclude the week, it was down from 0.1720 to 1.1270.
Although it is undeniable that the Coronavirus has played a huge role in the stock market crash, that is not the sole reason for it. The decline, such as the correction for S&P 500 and Dow, is more likely due to the comparison to their fastest pace in years. That might lead to the return of inflation and the rising interest rates by the Federal Reserve. It is closely monitoring growths and effects for the economic outlook.