Stocks plunge as world economy grinds to a halt

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Global markets took a huge plunge today, as the Coronavirus (COVID-19) materializes worldwide. The S&P500 down 9.51%, the Dow down 9.99%, and Nasdaq down 9.43%.

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The Nikkel fell 4.41%, Hang Seng fell 3.66%, FTSE 100 fell 10.87% and the DAX fell 12.24%.

The entire global markets are in panic mode as the Coronavirus rises at an exponential rate, affecting athletes, celebrities and government officials.

The Coronavirus now has over 133,000 cases worldwide, with 4,951 deaths confirmed.

Yesterday, the Dow Jones Industrial Average officially ended its 11-year long bull market run after it closed out the day in bear market territory.

This was after Trump had announced that he would ban all travel between the U.S. and Europe for 30 days amid COVID-19 fears.

The NBA, NHL, MLS and other sports organizations have also suspended their seasons, as large gatherings pose extreme health risks to players and fans.

As fear continues to linger, companies around the world are implementing ‘Work From Home’ procedures in order to stop the viral spread of the pathogen’s global outbreak.

What’s Next?

The U.S. stock market is having one of its worst weeks since the 2008 global financial crisis. Today the Dow Jones also saw its biggest 1 day point drop since 1987. Many people are wondering how much further downside we have ahead?

As the global economy grinds to a halt, new cases will begin to slowly push the economy into a global recession.

We will begin to see how the impacts of the Coronavirus materializes, affecting global supply chains, earnings, debt obligations and job stability.

Today, Norweigan Airlines (NWARF) announced that it would cancel 4000 flights, and lay off half of its workers.

You can expect that there will be a lot of pressure on big companies like Boeing (BA), General Electric (GE), and General Motors (GM) with large pension liabilities. A lot of these companies also have short-term debt obligations to meet, which are unlikely to be met in the current economic climate.

Today, the Federal Reserve announced that it would inject $1.5 trillion in total into the economy in order to prevent ‘highly unusual disruptions.’ This injection intends to stimulate the economy and provide liquidity amid market panic. The fed is likely to slash interest rates again, as rates move closer to zero.

If the virus is not contained over the course of the next few weeks, you can expect interest rates to go to negative. The Federal Reverse is doing everything in their power to keep the markets from further turmoil. However, these actions may be little too late as investor confidence is likely to further deteriorate going into the weekend.

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