Wall Street backpedals amid new virus fears, quarantines
Wall Street’s main indexes tumbled on Wednes- day, accelerating pullbacks a day after the Nas- daq notched a record high, after New York, New Jersey and Connecticut announced that visitors from states with high coronavirus infection rates must self quarantine.
Those states are Alabama, Arkansas, Arizona, Florida, North Carolina, South Carolina, Texas, Utah and Wash- ington, New York Governor Andrew Cuomo told reporters.
The S&P 500 .SPX was briefly down about 3% and was last off 2.6%. The Dow Jones Industrial average .DJI was off 2.6% and the Nasdaq off 2.33%, after posting its fifth closing record this month on Tuesday.
“I felt that markets were pricing in too much perfec- tion for the past couple of weeks. We were overbought both on a technical and a fundamental level. I’m not sur- prised by this (sell-off), especially with the news that came out that New York, New Jersey and Connecticut would be putting in a 14-day quarantine for anybody traveling from (coronavirus) hotspots. I think you’re going to see more news like that, and unfortunately, I think that’s going to translate into shock to the people that have been overly optimistic about how this is going to play out. Even if you look at yesterday – gold hitting a multi-year high, the 10- year treasury yield being at 0.7% and the dollar selling – they’re not bullish signs for U.S. stock markets.”
“It’s this kind of slow realization that we’re not go- ing to see a straight-line improvement coming out of the lockdown phase of the virus.”
“Maybe a month ago we started to see strong eco- nomic data as the lockdown orders were being lifted, and the expectation was that things were going to go swim- mingly. Now we’re starting to see scary headlines from certain places again like a Houston-area ICU full and Florida reporting a steep acceleration in cases.”
“I don’t think we’re headed toward broad lockdown orders and I don’t think that is the expectation on consen- sus either. But even if that isn’t true you’re still not going to see stronger economic activity either. Even if it isn’t mandated by the government to stay home, people aren’t going to be comfortable going out. They’re not going to be out and about shopping.”
“It’s the persistent headlines of increasing virus num- bers with Texas and Arizona reporting more it seems this story might be coming back. A week ago everything was great. The economy was opening up the unemployment number came in as a surprise.
“We’re getting a little more bad news creeping in to the market that we hadn’t priced in. We thought we were past this ... it’s not unwarranted but it’s definitely a reac- tion to the headlines.”