Wall Street Logs Worst Q Since 2008    03/31 15:40

   Stocks fell Tuesday to close out Wall Street's worst quarter since the most 
harrowing days of the 2008 financial crisis.

   NEW YORK (AP) -- Stocks fell Tuesday to close out Wall Street's worst 
quarter since the most harrowing days of the 2008 financial crisis.

   The S&P 500 dropped a final 1.6%, bringing its loss for the first three 
months of the year to 20% as predictions for the looming recession caused by 
the coronavirus outbreak got even more dire. Stocks haven't had this bad a 
quarter since the last time economists were talking about the worst downturn 
since the Great Depression, when the S&P 500 lost 22.6% at the end of 2008.

   The surge of coronavirus cases around the world has sent markets to 
breathtaking drops since mid-February, undercutting what had been a good start 
to the year. Markets rose early in the quarter, and the S&P 500 set a record 
with expectations that the economy was accelerating due to calming trade wars 
and low interest rates around the world.

   But benchmark U.S. crude oil dropped by roughly two thirds this quarter on 
expectations that a weakened economy will need less fuel. The yield on the 
10-year Treasury dropped below 1% for the first time as investors scrambled for 
safety, and it ended the quarter at roughly 0.67%. Germany's DAX lost a quarter 
of its value, and South Korean stocks fell just over 20%.

   The big question is if markets will get worse. At this point, no one knows. 

   "People are trying to digest the length and magnitude of what the 
coronavirus impact is going to be," said George Rusnak, managing director of 
investment strategy at Wells Fargo Private Bank.

   The steep drops from Tokyo to Toronto in recent weeks reflect investors' 
understanding that the economy and corporate profits are in for a sudden, 
debilitating drop-off. Economies around the world are grinding to near 
standstills as businesses close their doors and people hunker down at home in 
hopes of slowing the spread of the virus.

   But markets have also cut their losses in recent weeks on hopes that massive 
aid from governments and central banks around the world can blunt the blow. The 
S&P 500 was down nearly 31% for the quarter at one point, but it has climbed 
15.5% since last Monday.

   The Fed has promised to buy as many Treasurys as it takes to get lending 
markets working smoothly after trading got snarled in markets that help 
companies borrow short-term cash to make payroll, homebuyers get mortgages and 
local governments to build infrastructure. Congress, meanwhile, approved a $2.2 
trillion rescue plan for the economy, and leaders are already discussing the 
possibility of another round of aid.

   Whether markets have indeed found a bottom or whether investors have become 
too optimistic about the economic rebound coming after the viral outbreak peaks 
is impossible to say without knowing when the number of new infections will hit 
its peak.

   "We're kind of on this little milestone journey with markets," said Brent 
Schutte, chief investment strategist at Northwestern Mutual Wealth Management 
Co. "First, we get the economic plan in place, then we have to start to see 
some of the containment actions pay off. At some point it's going to be how do 
we get back to work."

   Among the next milestones for investors is Friday's jobs report, which is 
expected to show a sharp drop in payrolls. Companies will also being reporting 
their earnings results for the first quarter in upcoming weeks, and analysts 
are looking for the steepest drop in profits since the start of 2016, according 
to FactSet.

   The numbers may get even worse in the following quarter. 

   Goldman Sachs economists said Tuesday they expect the U.S. economy to shrink 
34% in the second quarter, but they expect growth to rebound in the third 
quarter.

   The S&P 500 fell 42.06 points to 2,584.59. The Dow Jones Industrial Average 
lost 410.32, or 1.8%, to 21,917.16, and the Nasdaq was off 74.05, or 1%, to 
7,700.10.

   The relatively modest moves are a big departure from earlier in the month, 
when huge swings punished investors. The S&P 500 had its worst day since Black 
Monday 1987 on March 12 with a 9.5% loss, for example, only to outdo itself 
with a 12% drop two trading days later. Sandwiched in between was a 9.3% surge.

   The number of known coronavirus cases keeps rising, and the worldwide tally 
has topped 830,000, according to Johns Hopkins University. The United States 
has the highest number in the world, more than 170,000.

   Most people who contract COVID-19 have mild or moderate symptoms, which can 
include fever and cough. But for others, especially older adults and people 
with existing health problems, the virus can cause pneumonia and require 
hospitalization. More than 41,000 have died worldwide due to COVID-19, while 
more than 175,000 have recovered.

   We're still not even close to peak coronavirus in the U.S. which has already 
reported more cases than any other country and will sadly likely see a huge 
spike in the number of deaths, meaning further lockdown measures will likely 
follow," said Craig Erlam, senior market analyst at OANDA Europe. "Huge 
challenges still lie ahead."


(CZ)