Chat with us, powered by LiveChat

Second Quarter Begins. Trump’s Warning

By April 3, 2020 news
covid-29 trump's warning

The US market has endured the most painful first quarter in history, and the suffering isn’t just over yet. The second quarter launched in the red. While the COVID-19 crisis is on the rise, the S&P 500 falls for the third time in just four days, each time hitting the new low.

President Trump, whose comments are usually filled with unmatched optimism, couldn’t help but express his concerns about the impact of the pandemic. Americans were advised to prepare for “very, very painful two weeks” ahead. Besides the 100,000-240,000 deaths projected by the White House officials over the next two weeks, there are some other good reasons why Trump’s previously positive outlook has subsided.

Market In Numbers 

  • YTD: Dow is down 26.61%. Experts speculate that the Dow could face its worst year since 2008 when DJIA lost 33.64%
  • YTD: S&P fell by 23.53% and may also be on its way towards its worst year since 2008 when the S&P lost 38.49%
  • The Nasdaq Composite dropped 339.52 points (4.41%)
  • 11/11 sectors were negative on Wednesday. The biggest fall of around 6% was shown by Utilities and Real Estate.
  • New orders received to factories fell to an 11-year low.
  • Business closures pushed private payrolls down by 27,000 jobs in March.
  • To no one’s surprise, airlines and cruise operators took a massive hit, with United Airlines down 18.7% and Carnival Corp dived 33%.

“The longer people stay home the longer it takes for the economy to restart and the longer it takes for corporate earnings to come back”, said Chris Zaccarelli, Chief Investment Officer, Independent Advisor Alliance, Charlotte, NC.

John Porter, a fund manager at Mellon Investments Corp said “the global economy has hit a wall, there’s a tremendous amount of uncertainty, and that’s contributing to the volatility in the markets and the downward trajectory we’ve seen the last few days.”

No one can tell for sure when life in the US is going to be back to normal. It is too early to make any sort of predictions as we haven’t seen the peak of the coronavirus crisis yet. What’s certain is that the economy is going to struggle to survive and later to recover after such a drastic impact.

However, experts urge consumers to ignore fear mongers that foreshow the end of the world. A crisis is a temporary phenomenon that happens every so often. It is going to get worse before it gets better, as we see in China.