The Wall Street Journal - 21.03.2020 - 22.03.2020

A8| Saturday/Sunday, March 21 - 22, 2020 THE WALL STREET JOURNAL. THE WALL STREET JOURNAL. Saturday/Sunday, March 21 - 22, 2020 |A

THE CORONAVIRUS PANDEMIC

Jan. 10:Chinareportsfirst

deathfromcoronavirus.

Feb. 19:S&P500hits13th

recordof2020andNasdaq

Compositehitsits16th.

Feb. 21:Goldandbondssurge

withinvestorsseeking

havens,pushing10-yearyield

below1.5%.Thenumberof

casesinSouthKorearises

sharply.

Feb. 24:Numberofcases

outsideChinasurges.Traders

rampupbetsonlowerinterest

rates.

Feb. 25:CDCwarnsitexpects

widerspreadofvirusinU.S.

NewcasesrisesharplyinItaly,

IranandSouthKorea.IMF

chiefsaysbodyis

downgradingglobal-growth

projections.

Feb. 26:Microsoftwarns

supplychaindisruptions

wouldhurtsales.VPMike

Penceputinchargeofvirus

response.

March 2:AppleandMicrosoft

recoupabout$193billionin

marketvalueasstockssurge.

Chinesemanufacturingdata

fromFebruaryplungedueto

coronavirus.

March 5:Schoolsshutinthe

Seattlearea.Senatepasses

emergency$8.3billion

spendingbill.

March 6:OilfallsafterOPEC

andRussiacan’treachadeal

todeepenoutputcuts.Cases

ofcoronavirustop100,

globally.Austin’sSouthby

Southwestfestivaliscanceled.

March 10:TrumpsaysWhite

Houseofficialsareconsidering

potentialmeasuresincludinga

payroll-taxcutandhelpfor

hourlywageearners.

March 11:Dow’s11-yearbull

marketends.WHOdeclares

coronavirusapandemic.

PresidentTrumpannouncesa

30-daybanonsometravel

fromEuropeintotheU.S.NBA

suspendsseasonafterplayer

testspositiveforcoronavirus.

March 13:Fedoverthe

weekendslashesits

benchmarkinterestrateto

nearzeroandsaysitwillbuy

$700billioninTreasuryand

mortgage-backedsecurities.

March 17:FederalReserve

saysitwillstartmakingloans

toU.S.companiestoease

fundingstrains.Trump

administrationbacksplanto

sendchecksdirectlyto

Americansaspartofa

$1trillionstimuluspackageto

helphouseholdsand

businesses.10-yearyieldposts

biggestjumpsinceSeptember

2008.

Feb. 27:Stocksfallinto

correctionterritorymore

than10%belowrecent

records.GoldmanSachs

projectsU.S.companies

willgeneratenoearnings

growthin2020.

March 9:Italyplaceswhole

countryunderquarantine.

U.S.crudeoilfalls25%to

$31.13,itsbiggestdropsince

1991.S&P500falls7%at

opentotriggercircuit

breakerforfirsttimein

years.10-yearTreasury

yieldhitsrecordlowof

0.501%.Goldhits

seven-yearhigh.

March 12:S&P500and

Nasdaqenterbearmarket,

downmorethan20%from

recentrecords.Fedsaysit

willmakevastsumsof

short-termloansavailable

onWallStreetandpurchase

Treasurysecurities.Leaders

inNewYork,NewJerseyand

Connecticutannounce

restrictionsonpublic

gatherings.

March 16:Stockshaveworst

daysinceBlackMondayin

1987.U.S.airlinesseekover

$50billioninfinancial

assistancefromthe

government.Datashow

businessactivityinChina

turnedbroadlynegativefor

thefirsttimeonrecordin

firsttwomonthsoftheyear.

March 18:U.S.crudeoilhits

18-yearlowof$20.37abarrel.

PresidentTrumpinvokes

DefenseProtectionActto

requirecertainordersfrom

businessestofightvirusand

announcesplanstoclosethe

borderwithCanadato

nonessentialtraffic.Senate

passesreliefbilltoprovidefree

testingandrequiresmaller

employerstogivetwoweeksof

paidsickleave.Fedsaysitwill

launchanewlendingfacilityto

backstopthemoney-market

mutual-fundsector.

March 19:Joblessclaimsrise

sharplyforweekended

March14.Londoncity

officialscloseportionsofthe

capital’ssubwaysystem.

DeathtollinIranrisesnear

1,300.

S&P 500 daily closes

Dec.31,

3230. 
      

Friday

2304. 
      

Feb. 193386.

10

• 
  
  
  
  • 
    
  
  
  
  

0

5

%

January February March

S&P 500, daily moves

Sources: FactSet (stock indexes, commodities, ETFs);

Dow Jones Market Data (dollar index)

Biggestdailypercentagedecline

–12%sinceOct.19,1987(BlackMonday)

demand repayment, triggering

sales of unrelated assets.

Gold has also been caught

in a painful selloff of almost

all raw materials. Commodi-

ties prices started falling as

the virus dented economic ac-

tivity in China in January, but

the declines have accelerated

since Saudi Arabia and Russia

launched an oil-price war ear-

lier this month. The prospect

of rising supply and crumbling

demand has sent U.S. crude oil

down 50% for the month to

about $22.50 a barrel.

Many analysts are worried

the oil-price crash will result

in bankruptcies of energy

companies, some of which

have borrowed heavily in re-

cent years. The fallout could

also ding lenders who are al-

ready struggling with the eco-

nomic slowdown and the Fed-

eral Reserve’s decision to cut

interest rates near zero.

Because of strains in short-

term money markets and criti-

cal markets like Treasurys, the

Fed has announced several

other steps, including buying

Treasurys and mortgage-

backed securities to keep mar-

kets functioning properly.

Those measures have ex-

tended to the currency mar-

kets, with concerns about a dol-

lar shortage outside the U.S.

driving the WSJ Dollar Index,

which tracks the dollar against

a basket of 16 other currencies,

to a nearly 18-year high..

times in recent weeks dropped

7% to trigger a circuit breaker

that halts trading for 15 min-

utes. The circuit breakers are

designed to limit declines. Be-

fore March 9, they hadn’t been

triggered since 1997.

And lately, investors haven’t

even been able to count on as-

sets other than stocks to insu-

late their portfolios.

The yield on the benchmark

10-year U.S. Treasury note has

risen sharply since closing at a

record low of 0.501% on March

9. Yields rise as bond prices
   fall, and the declines in Trea-
   surys—spurred by market dis-
   ruptions and the unwinding of
   Wall Street bets—have made
   volatility even more painful.
   At the same time, investors
   have shied away from corpo-
   rate bonds, municipal bonds,
   and emerging-market debt,
   driving record outflows in bond
   mutual and exchange-traded
   funds of nearly $109 billion
   during the week ended
   Wednesday, according to a
   Bank of America analysis of fig-
   ures from EPFR Global.
   Gold, another traditional
   haven, also peaked on March


10. Since then, it has fallen 11%,
    with investors needing to sell
    liquid assets to cover losses
    suffered in stocks. Some of
    that came after margin calls
    for those who had used stocks
    as collateral to buy other secu-
    rities. With the value of those
    positions shrinking, banks can

Just weeks after cruising to
new records, U.S. stocks have
sunk more than 30%, ending
the longest bull market ever.
Oil prices crashed to 18-year
lows and a stampede out of
bond markets and toward cash
has added to the turmoil.

School closures, workplace
shutdowns and restrictions on
gatherings have stalled com-
merce in a way many investors
have never seen, fueling bets
on a painful recession and a big
hit to corporate profits.
Waves of information about
the virus and how it is remak-
ing life in the western world
are driving massive swings in
markets throughout the day.
The manic moves often begin
overnight as futures trading
opens and Asian markets begin
trading, driving big shifts be-
fore many U.S. investors have
even woken up.
S&P 500 futures have often
dropped 5%, the maximum de-
cline allowed under exchange
rules. Before March 8, the last
time S&P futures had fallen
that much was after President
Trump was elected in 2016.
The chaos hasn’t ended
there. After regular trading has
started at 9:30 a.m. in New
York the S&P 500 has four

Article by Amrith

Ramkumar,

Graphics by Peter

Santilli and Max Rust

HOW THE

BULL MARKET

UNRAVELED

The market’s plunge reflects the pace at which coronavirus has

upended life, shutting down nations, states and cities. A few

weeks ago, stocks hit record highs,extending an 11-year bull

run. The reversal has been punctuated by unruly trading in

bonds, currencies and commodities, leaving few stable options.

JANUARY

FEBRUARY

MARCH

TREASURY ETFS

–6 0 % 0 +2 0 %

Cumulative percentage change, year to date

S&P500 DJIA

NASDAQ

COMPOSITE

NYSE

FANG+

INDEX

RUSSELL

2000

KBW

NASDAQ

BANK

INDEX

STOXX

EUROPE

600

NIKKEI

STOCK

AVERAGE

HANG

SENG

INDEX

CRUDE

OIL GOLD

WSJ

DOLLAR

INDEX

1-

YEAR

7-

YEAR

20+

COPPER YEAR

Note: The NYSE FANG+ Index includes Facebook, Apple, Netflix, Google parent Alphabet, Amazon.com, Alibaba Group Holding, Baidu, Nvidia, Tesla and Twitter. Crude-oil futures prices based on front-month contract.

Prices for copper and gold based on most-active contract. Treasury exchange-traded funds are the iShares 1-3 Year Treasury ETF, iShares 7-10 Year Treasury ETF and iShares 20+ Year Treasury ETF.

TREASURYETFS

S&P500 DJIA NASDAQ

COMPOSITE

NYSE

FANG+

INDEX

RUSSELL

2000

KBW

NASDAQ

BANK

INDEX

STOXX

EUROPE

600

NIKKEI

STOCK

AVERAGE

HANG

SENG

INDEX

CRUDE

OIL

GOLD WSJ

DOLLAR

INDEX

1-

YEAR

7-

YEAR

20+

YEAR

COPPER

–28.7% –32.8 –23.3 –14.6 –39.2 –46.6 –29.5 –30.0 –19.1 –63.3 –22.4 –2.5 +8.1 +2.2 +8.1 +17.

Dow Jones Industrial

Average record close

China reports first

coronavirus death

WHO declares outbreak

an international public-

health emergency

CDC says it expects

virus to spread in U.S.

Federal Reserve cuts

interest rate by half

percentage point

S&P 500 and Nasdaq

Composite record closes

U.S. crude falls to

$20.37 a barrel, lowest

settle since 2002

Gold rises to $1,674.

and the 10-year Treasury

yield falls to 0.501%