Wall Street’s worst week since 2008

March 5, 2020

The worst week on Wall Street since 2008 was due to the coronavirus, just nine days after the leading benchmark closed at a record high. The world is preparing for a pandemic, and investors fear that this will lead to a recession. The S&P 500 is on its way to end the week down 13%, its worst week since 2008. On February 19, a record 14% was reached, but the components seem to be in bad shape, and it's getting worse. 

Forty-seven percent of the S&P 500's components have fallen more than 20% from their 52-week highs, and only about 10 S&P500s are less than 10% below their highs. A 10% drop in the current market state is considered to be in the bull market. While a drop of 20% or more is expected to decline even further, and is in the bear market.

The energy market fell by 33%, the worst sector, while healthcare fell by less than 10%. The consumer staples’ sector fell 11%. Major groups such as Apple & Mastercard have fallen by about 19%. While other groups such as Walmart and Johnson & Johnson have fallen 14

"As severe as the decline has been, and even if most of the damage has been done, it's hard to believe it will be over in a week," Wellington Shields & Co market analyst Frank Gretz argued. 

The Federal Reserve released a statement saying it stood ready to help the economy if needed. Investors increasingly expect the Fed to cut rates at its next policy meeting in mid-March.More companies are warning investors that their finances will take a hit because of disruptions to supply chains and sales. 

Reuters  (2020, Feubrary).Think the S&P 500 Is in Bad Shape? Its Components Look Worse Retrieved March 2020.

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