The Amercian economy has been through one of the most painful first quarters in its history, with no hope for improvement yet. The second quarter also began unprofitably, with the COVID-19 crisis still on the rise. The S&P 500 fell for the third time in just four days, each time hitting a record low.
US President, Donald Trump, despite his general overt optimism, also expressed his concerns regarding the impact of the pandemic. He advised his fellow Americans to be prepared for the “very, very painful two weeks” ahead. White House officials predict that the US will suffer the loss of 100,000-240,000 individuals over the course of the next two weeks, with the economy also suffering dramatically from the crisis.
- YTD: Dow is down 26.61%. Experts suspect that the index could be going through its worst year since 2008, when it suffered losses of over 33.64%
- YTD: S&P fell by 23.53% and could also be on its way towards its worst year since 2008, when it lost 38.49%
- Nasdaq also dropped 339.52 points (4.41%)
- 11/11 sectors were negative on Wednesday. The biggest decline of around 6% was experienced by Utilities and Real Estate.
- New orders received to factories fell to an 11-year low.
- Business closures pushed private payrolls down by 27,000 jobs in March.
- Tourist industry takes a hit: United Airlines fell by 18.7% and Carnival Corp dived 33%.
“The longer people stay home the longer it takes for the economy to restart and the longer it takes for corporate earnings to come back”, said Chris Zaccarelli, Chief Investment Officer, Independent Advisor Alliance, Charlotte, NC.
John Porter, a fund manager at Mellon Investments Corp said “the global economy has hit a wall, there’s a tremendous amount of uncertainty, and that’s contributing to the volatility in the markets and the downward trajectory we’ve seen the last few days.”
With the coronavirus crisis well underway, it is uncertain when life will be back to normal, both in the US, as well as abroad. Nevertheless, the effects the crisis has had on the economy of the world are hinting to a difficult recovery, after such a drastic shock.
Experts urge consumers to ignore fear mongers that foreshow the end of the world. As seen in China, which was hit first by the virus, the crisis is temporary and after the disease has had its peak, life will steadily get back to normal.