Coronavirus Pandemic Plummets Dow over 2,300 into the bear market territory.
- All other equity markets followed the Dow Jones Industrial Average downward direction
- The financial markets opened lower this morning dropping 7%
- Trading halted for 15 minutes this morning after 5 minutes of trading
- When the financial markets drop by 7%, the markets halt trading for 15 minutes
- This is the second time the equity markets halted trading for 15 minutes due to the sudden plunge of stocks
- A bear market is when the stock market drops by 20% from the recent high
- The stock market sell-off led stocks in market correction territory
- The markets are now officially in a bear market
- The 11-year bull market has officially ended
- The yield on the 10-year Treasury tanked below 1.0% sending mortgage rates at an all-time low
- However, lenders are increasing rates when mortgage rates are at a historic low
- This is because they have too much business and is steering business away unless they can price gouge borrowers
- This is upsetting borrowers, loan officers, and mortgage companies nationwide
- The World Health Organization (WHO) declared the coronavirus officially a pandemic yesterday.
In this BREAKING NEWS Article, we will discuss and cover The Coronavirus Pandemic Plummets Dow 2,300 Into Bear Market Territory.
Coronavirus Pandemic Plummets Dow Making It The Worst Day On Wall Street Since 1987
Today’s drop of 2,300 plus points of the Dow Jones Industrial Average marks the worst day on Wall Street since the Stock Market Crash of 1987.
- The drop in the Dow and market volatility was due to WHO declaring the coronavirus outbreak a global pandemic
- Fear is spreading and economists are worried about the country entering a recession
- The Trump Administration is doing everything possible to minimize fear and have control of the coronavirus pandemic
Today’s market sell-off has now dissipated most of the gains in Wall Street runup since the election of President Donald Trump.
Coronavirus Pandemic Plummets Dow And Other Equity Markets
The Dow dropped 9.99% today for its worst day since October 19th, 1987 ending an 11-year bull-market rally and entered the bear market. Wall Street fears the U.S. economy will be entering a recession if the markets continue to be volatile like it has been the past several weeks. All other equity markets entered the bear market territory. The S&P 500 slid 9.5% at the close. The S&P 500 plummeted 26.7% since its all-time high last month breaking the 20% threshold for a bear market. The European financial markets plummeted 12% even though the European Central Bank committed to buying more bonds to help with the economy. President Trump announced yesterday that he is suspending all incoming travel to the United States from Europe. This announcement sent panic to investors and Wall Street about fear the government is uncertain about the fate and economic damage the coronavirus pandemic will do or how long it will last.
What Experts Are Saying
Many experts and economists who shrugged off the coronavirus outbreak as a short-term problem now has changed its tune. There are more and more cases as well as deaths throughout the United States. Many companies are being affected, big corporations and small businesses.
Just a few weeks ago, the Dow Jones Industrial Average was up over 50% since Donald Trump was elected as the 45th President of the United States. President Trump was sworn in as President of the United States on January 20, 2017. By today’s close of trading, the Dow Jones Industrial Average was only up 6.9%. However, the Dow was still up by 16% since just before Donald Trump’s election in November 2016.
How Serious Is The Coronavirus?
Nobody knows exactly how serious the coronavirus pandemic is and/or will be. There is no cure and no vaccine. Medical experts expect a vaccine may take longer than 18 months. More than 128,000 people worldwide have been infected by the virus and over 4,700 people died. 39 people have died in the United States with death tolls climbing. The coronavirus affects older people with existing health problems more seriously than younger folks in good health. Medical professionals and experts say older people in poor health are at risk of the virus. However, younger folks in good health can survive the coronavirus and recover in a matter of a few weeks. The Trump administration is proactive in dealing with the coronavirus pandemic.
How The Volatile Stock Markets Is Affecting Mortgage Rates
The volatile stock markets are affecting the housing and mortgage markets. The stock market meltdown and sell-off are plummeting yields on the 10-year Treasury which is a benchmark for mortgage rates. Mortgage rates have plummeted. 15-year fixed-rate mortgages are under 3.0%. Mortgage rates on 30-year fixed-rate mortgages are now in the low 3.0% range. However, lenders are increasing rates over 4.25% or higher with pricing adjustments because they have an overload of mortgage applications. In a way, it is price gouging. Many lenders have completely shut down taking new mortgage applications. Other lenders are increasing mortgage rates because of the major volume of new mortgage applications. For example, many of our borrowers were quoted rates at 3.125% last Friday. However, on Tuesday, investors jacked up rates north of 4.25%. Today, mortgage rates got higher by 0.125% to 0.25%. As long as mortgage borrowers locked their loans, they are fine. However, if they did not lock their mortgage loans, then they need to hold off until lenders drop their mortgage rates. Gustan Cho Associates Mortgage Group will keep our viewers updated on this breaking news in the coming days and weeks.
March 12, 2020 - 4 min read