Financial markets across the world exercised their own form of social distancing as they completely ignored any sort of interventions and went deeply into bear territory amidst Covid-19 panic, which brought upon them their worst day of trading since the 1987 crash. An automatic timeout in trading, a USD 1.5-trillion Federal Reserve pledge to sop up the bond market, or a series of reassurances from the Trump administration, nothing helped. The Dow Jones industrial average tumbled by 2,352 points, fell by almost 10%, with the S&P 500 and Nasdaq suffering losses of 9.5% and 9.4%, respectively.
Travel halts across the world owing to the government restrictions on traveling and concerns revolving around the containment of the virus have caused widespread panic. The energy sector was majorly hit as an oil price war, along with an estimated fall in demand that came upon the investors. Technology giant Amazon fell by nearly 8%, while Apple dropped by 9.9%, whereas the consumer durables sector was one of the market’s few gains that went up by more than 6% as buyers hoarded supplies in fear of the lockdown. Investors were seen to be not convinced by President Trump’s Wednesday-night speech or his Thursday reassurance that the markets will bounce back big at the right time. Trump restated his proposal to suspend the payroll tax even when the key members of Congress were skeptical about its multi-billion-dollar cost. Several talks about the workforce reductions are already underway for the transportation companies affected by the Covid-19 after Trump’s Wednesday night announcement that he would suspend all travel from 26 European countries.
Democrats led by House Speaker Nancy Pelosi have also proposed a paid sick leave to cover the 14-day quarantine, along with increased food aid, unemployment insurance, and free medical testing for people. Their plan would cover two-thirds of the salary of workers at companies. And businesses that support the paid leave scheme would be compensated with tax credits. However, it remains unclear how much help such measures will bring to the wrecked economy.
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