Welcome to the new Coronavirus Alerts newsletter.
My goal is to keep you up to speed on the rapidly unfolding coronavirus health crisis. You will also get my insights on the impact to the economy and financial markets.
After plunging 7% on Monday, U.S. stocks are opening higher. The major indices such as the S&P 500 are posting 4% gains in early trading. Investors are stepping up to buy stocks after one of the biggest declines in recent history.
So, let’s dig into the latest news…
The Big News…
Italy in “Lock-Down” as Coronavirus Infects +9,000 People
The Italian government is locking down the entire country. That expands an earlier move to restrict movement in the north. The government is now banning public gatherings and restricting travel into and out of the country. This is a huge move for a country with 60 million people.
New York Declares State of Emergency
New York just issued a state of emergency warning. The state has 143 cases of Covid-19 – more than any other state. Meanwhile, the mayor of New York City says people should begin working from home. And the city is considering closing down mass transit in order to help stop the spread of the virus.
Oil Plunges 20% as Saudi Arabia Launches New Oil War
Demand for oil is plunging due to the economic slowdown. During the first two months of this year demand for oil dropped by 2.5 million barrels per day. OPEC attempted to reduce global output in order to support higher prices.
However, Russia wasn’t willing to reduce production. After walking away from the table, Saudi Arabia decided to increase production by 1 million barrels per day. And the move results in plunging prices for crude oil.
WTI crude has now fallen by nearly 50% to a current price of $31 per barrel. The decline in crude prices is one sign that the economy is heading for a recession in 2020.
The crash in oil prices is increasing market volatility – creating a unique trading situation. Click here to see how to use volatility to earn quick profits during a market crash.
Amazon, Google, Facebook and Microsoft: ‘Work from Home’
Large companies are encouraging – or in some cases forcing – employees to work from home. Amazon, Google, Facebook and Microsoft have all told Seattle-based team members to stay away from the office. Many companies have also restricted employee travel within the U.S. and abroad. Office closures are also becoming common in major European cities.
1 Million Covid-19 Tests Available
VP Mike Pence says that there are now 1 million coronavirus tests available. And they’re being shipped out to hospitals around the country. By the end of the week there will be an additional 4 million tests available.
This means widespread testing will be available nationwide. Expect that the number of identified cases in the U.S. will increase rapidly in the coming week as more tests are administered.
Stocks Plunge 7% On Monday
U.S. equities dropped sharply on Monday. The rapid expansion of the virus – along with plunging oil prices – send markets sharply lower. Circuit breakers shut down the markets for 15-minutes in the morning in an effort to slow the market meltdown.
The Coronavirus Numbers
Here are the numbers from Tuesday morning at 8:30am ET.
- 116,059 Infected worldwide
- 4,089 Deaths
- 729 Infected in the U.S.
- 27 Deaths in the U.S.
President Trump is planning to meet with Congress on Tuesday. He’s pushing for additional tax cuts to help support working Americans. This could be done through a payroll tax cut – putting more cash in the pocket of every working American.
In other news from Washington – six members of Congress are in quarantine after having exposure to a person with coronavirus. This includes Sen. Ted Cruz and incoming White House chief of staff Mark Meadows.
U.S. stocks are opening higher as investors go bargain shopping. The bounce back is likely a knee jerk reaction to yesterday’s stock market bloodbath.
This temporary jump does NOT indicate a “bottom” for stock prices. As the news continues to get worse – and the economic impact is better assessed – I’d expect the market to continue falling from this level.
Stock market volatility has surged in recent days. And that’s why my colleague Andy Crowder is hosting an exclusive event…
The 10-Minute Volatility Trade (click here – it’s FREE).
Access this exclusive training to see how to profitably trade the market – even when stock prices are crashing.
I hope you find this issue of Coronavirus Alerts to be informative. If you enjoyed it you can expect to continue receiving future issues.
Yours in Health & Wealth,