Investors seem to be taking a wait-and-see approach to the markets right now, after a bumpy evening where a presidential tweet and commitment of economic support seemingly sent traders to smash buy buttons before realizing that there was no new substance behind Monday's night moves.
Economies around the world are in for a rough ride as businesses shut down and social distancing measures take effect to limit the spread of the novel coronavirus, which is already a global pandemic and an epidemic in the U.S.
After their worst day of trading since 1987, stocks rose sharply in overnight trading. The pattern of shares falling sharply, followed by a rebound of sorts, continues, then, as traders continue to look for signals amidst the global noise; how to value one promise of further government stimulus, for example, against more border shutdowns and bad corporate news is now daily labor.
But as stocks opened domestically, they did manage slight gains, a welcome sight after yesterday's sharply negative trading. Here's the morning report at the open:
- Dow Jones Industrial Average: rose 314.81 to 20,503.33 for a gain of 1.56%
- S&P 500: rose 52.91 to 2,439.04 for a gain of 2.22%
- Nasdaq Composite: rose 147.45 to 7,052.05 +147.45 for a gain of 2.14%
Even cryptocurrencies are seeing a bit of a comeback, though they, like stocks, remain depressed when compared to recent highs. Bitcoin, the most famous of all cryptos (as the distributed tokens are sometimes called), is off by about half.
The latest economic forecasts are bleak. Goldman Sachs expects a Q1 contraction of perhaps 5%, a shocking figure. Even more, per reporting, the bank sees it likely that the U.S. will enter a recession. If you were waiting for the correction, this is it. We have now seen the end of the long-running bull cycle that brought companies like Dropbox and Airbnb and Slack and Zoom from little-to-nothing to giant-status. This is the downturn. A new generation of startups will soon be born that will lead the markets higher in the future. But, given the economic data we're seeing, not yet.
The TechCrunch crew will keep tracking the public markets so long as they are fascinating. More on how select companies performed when the day closes.