Markets sink in wild trading as Washington debates a rescue package
It was another day of wild swings on the market, which began with futures plunging to their 5% limit on Sunday night. U.S. Senate Democrats and Republicans had failed to agree on a stimulus package worth at least US$1.6 trillion. Suddenly, markets popped into the green at Monday’s morning bell. The catalyst was Jerome Powell who announced that the U.S. Fed would be buying unlimited amounts of U.S. treasuries and mortgage-backed securities.
It’s an unprecedented move to keep money flowing to American companies big and small, cities and citizens during a crisis that could be more severe than even the 2008-9 recession. The see-saw session ended with the S&P and Dow losing 3%, though the tech-heavy Nasdaq shed only 0.27%, supported by names like Amazon, up 3% and Netflix, rallying 8.24%. Faring worse was the oil-heavy TSX fell 5.26%. Materials continued to be the safe haven with Silvercorp soaring 31% and Argonaut Gold rallying nearly 16%. However, beaten-up names like Cargojet enjoyed a 10.46% rise, as did Canada Goose, gaining 9.15%.
A glimmer of hope amid this gloom comes from, ironically, China. There are no new native cases with only a handful trickling in from people re-entering from various effected countries. Bloomberg estimates that 85% of China’s economic activity has returned, except the epicenter of Hubei.