After the World Health Organization declared the coronavirus a pandemic on Wednesday, Trump addressed the U.S. and the world that evening. He shocked viewers by closing all traffic between American and Europe, including cargo (later retracted), though excluding the U.K., but offered vague promises to stimulate the U.S. economy and hardly any details about testing Americans for the disease. As he spoke, Dow futures slipped 1.4% during the speech and tumbled 2.15% just minutes after it ended. Clearly, the speech failed to reassure nervous investor nor calm scared Americans.
Instead, it wreaked confusion and inspired anger from Europe, who weren’t warned by his drastic move. Predictably, markets in Germany, France and the U.K. plunged 11-14% Thursday, before the tsunami of selling hit North America. Wall Street shed nearly 10% across the board while the TSX plummeted 12.34%. Even gold lost ground, though less dramatically. The VIX soared 40%. Thursday’s sell-off was ugly and the worst day on Wall Street since 1987’s Black Monday.
The session’s only “winners” were stocks that fell less than the benchmark indices. CAP REIT lost only 3.87%. Healthcare names, Centene, shed only 1.42%, while Johnson & Johnson closed -4.85%. Unfortunately, the near future remains uncertain, though investors know that eventually this bear market will stop. When? At dinnertime Thursday, Dow futures were down merely 0.35%. Meanwhile, China says that the peak of the epidemic has passed there and is starting to let industries resume at the epicentre, Hubei province.
The 11-year bull run has ended.