Global stocks experienced another rout Thursday as the human and economic toll from the coronavirus continued to rise and more governments shut down activity to try to contain the outbreak.
Stock market gains last week sparked talk among some investors that the market might be adjusting to the abrupt suspension of so much economic activity as the West attempts to limit the spread of the virus. But there was no way to sugarcoat President Donald Trump’s pronouncement late Tuesday that the US was in for “a very, very painful two weeks” as health experts said the US death count could reach 240,000 people.
The statement was a major shift in tone from the US president, who had long downplayed the risk of the virus and as recently as a week ago discussed reopening the US economy by Easter on April 12. “America continues to wage all-out war to defeat the virus, this horrible, horrible virus,” Trump said Wednesday after markets closed, during his daily White House briefing.
The bad news continued as the number of coronavirus cases continued to rise and Florida — one of the last major states still largely operational — headed to a 30-day stay-at-home policy following an order from the governor. The Dow plunged nearly 1,000 points, or 4.4 percent, to finish the day at 20,943.51.
“A lot of investors are starting to doubt the V-shaped economic recovery that last week’s furious rally pointed at, and today, a lot of them headed for the exits at the same time, leading to carnage in the most virus-sensitive sectors,” Gorilla Trades strategist Ken Berman said in a note.
European equities also fell hard, with London, Frankfurt, and Paris all down around 4 percent. Investor sentiment in Europe was also knocked by poor manufacturing survey data, as well as the gloomier outlook from Trump and others about the virus itself.
The World Health Organization said it is concerned about the recent “rapid escalation” and the global spread of the new coronavirus pandemic. “The number of deaths has more than doubled in the past week… in the next few days, we will reach one million confirmed cases and 50,000 deaths,” WHO chief Tedros Adhanom Ghebreyesus said.
Italy on Wednesday extended its economically-crippling lockdown until April 13 to help stem coronavirus infections that have claimed 13,115 lives. In New York, the US hotspot, Governor Andrew Cuomo told police officers to get “more aggressive” in enforcing social distancing Wednesday as he closed the Big Apple’s playgrounds and basketball courts.