With the World Health Organisation declaring the novel coronavirus COVID-19 a pandemic, stock markets across the world fell into bear territory and governments proposed economic stimuluses.
US stocks wiped out more than all the gains from a huge rally a day earlier as the Dow Jones Industrial Average dropped 1,464 points, bringing it 20% below its record set last month and putting it in what Wall Street calls a “bear market.” The broader S&P 500, which professional investors care more about, is just 1% away from falling into bear territory and bringing to an end one of the greatest runs in Wall Street’s history, reported .
Wall Street’s plunge followed a steep decline by markets across Asia.
In Australia, Prime Minister Scott Morrison detailed a A$17.7 billion stimulus package and Italy’s government announced a 25 billion euros (nearly US$28 billion) to boost anti-coronavirus efforts and soften economic blows, including delaying tax and mortgage payments by families and businesses. The UK government announced a 30 billion-pound (US$39 billion) economic stimulus package and the Bank of England slashed its key interest rate by half a percentage point to 0.25%.
US President Donald Trump personally seeks a payroll tax holiday until the end of the year, but whether that will be part of the package announced by Congress and the White House is still to be announced. The speed with which a stimulus package fights the impacts of the coronavirus pandemic is nearly as important to markets as the actual financial details, CNBC reported.
Trump will address the nation on Wednesday evening.
“If we get rid of the problem quickly, everything solves itself. We don’t need stimulus. So that’d be good. But we are talking about various forms of stimulus,” said Trump.
The financial packages are to prevent countries from falling into recession. Australia has not entered recession in 28 years, the longest period of time by any country.
— Coronavirus Updates (@CoronaVirusUPDT) January 30, 2020
— Nordic News (@Nordic_News) March 11, 2020
Iran and Italy are the countries with the most dramatic increases in coronavirus but Dr Mike Ryan, the WHO’s emergencies chief, “guaranteed” other countries will be in a similar situation soon. The aim of countries worldwide is to slow the transmission of COVID-19 and reduce illness and death, while minimising social and economic impacts.
Confirmed cases of coronavirus COVID-19 worldwide on March 11. Photo: John Hopkins University
Normal life was increasingly curtailed, with Pope Francis live-streaming prayers from the privacy of his Vatican library as police barred access to St. Peter’s Square, emptying it of tens of thousands of people who attend the weekly papal address. In Denmark, Prime Minister Minister Mette Frederiksen announced that all schools, preschools and universities will close as of Monday.
In the US, Seattle announced that public schools would close for about 53,000 students and large gatherings were banned in San Francisco and in Washington state.