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.
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