Futures down limit again. The S&P 500 Index opened sharply lower this morning, with S&P futures hitting their 5% loss trigger in pre-market trading for the second time this week. Markets are clamoring for an aggressive stimulus package from Washington as the outbreak—now officially a global pandemic—continues to spread, many US consumers shut down, and certain segments of the US economy face significant disruption. The news over the past 24 hours that more major events had been cancelled, including the NBA basketball season, and a major celebrity, Tom Hanks, had contracted the disease added to fears but will at the same time help accelerate containment.
Dow enters bear market; S&P 500 and NASDAQ to follow. The S&P 500 opened in bear market territory this morning, ending the longest-ever bull market that appears to have ended on February 20, less than one month ago. The 19-session bear market decline from an all-time high for the Dow Industrials was the fastest ever, beating the next fastest bear market in the Dow by nearly 20 days. The quicker these indexes can find their lows the better, as a once-in-a-decade opportunity may be emerging for investors who have dry powder. The progress toward containment in China is reassuring, though we certainty empathize with nervous investors as our daily lives are disrupted and we all wait for signs that the crisis has peaked. We will discuss the quick move to a bear market later today on the LPL Research blog.
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