The markets, your money and talk of a worldwide “coronavirus” recession.
What to know.
Why it matters.
IMPORTANT CONTEXT
Stock prices have gone up since 2009.
The 11-year run of market gains (also known as a “bull market”) is the longest in American history.
America is near full-employment. The latest jobs report on Friday indicated 273,000 jobs added, 3.5% unemployment in February.
STOCK MARKET
- Notable This Week: largest single day decline in stock prices since the 2008 financial crisis; stocks entered “bear market” territory.
- Why Stocks Dropped: Uncertainty, fear over the impact of COVID-19 on global growth, consumer habits.
- Bear market = stock prices fall more than 20%. This “down market” can last days, weeks, months, or years. A “bull market” references rising stock prices.
OIL PRICES
- Notable This Week: Largest decline in oil prices in more than 25 years.
- Why Prices Dropped: Oil fuels the global economy; slower economic growth due to COVID-19 fears *could* lead to lower demand & lower prices.
- ALSO: Saudi Arabia wanted to cut oil production along w/other oil producers to raise falling prices (less supply = higher prices); Russia disagreed. A price war has ensued, driving prices lower.
Why Oil Prices Matter:
“If these prices go on for too long, there will be a lot of bankruptcies. You need at least $40 a barrel to break even for production in the United States and most won’t be making money at those prices.”
“What we have now is really two epidemics. We have an epidemic of the coronavirus, but we also have an epidemic of fear based around a narrative that is not necessarily keeping up with scientific reality. And, this narrative has been quite striking. It’s a dangerous time for the stock market.”
“We are going to take care of and have been taking care of the American public and the American economy.”
“A global recession is more likely than not.”
Reminder: Recessions, or periods of when the economy contracts rather than grows, can vary in severity and length of time. Over the last 100 years, recessions ranged from several years during the Great Depression to a period of 6 months.
Sources
Coronavirus: Emergency Declarations CLICK HERE
Coronavirus v. Flu CLICK HERE
Coronavirus: What’s a Pandemic? CLICK HERE
Coronavirus: Vaccine & Treatment CLICK HERE
Coronavirus: Masks On Or Off? CLICK HERE
New New Coronavirus CLICK HERE
Current job market info CLICK HERE
Cycle of Recessions CLICK HERE
Two epidemics combine to make for a ‘dangerous time for the stock market,’ Nobel Prize–winning economist warns https://www.marketwatch.com/story/two-epidemics-combine-to-make-for-a-dangerous-time-for-the-stock-market-nobel-prizewinning-economist-warns-2020-03-10
Coronavirus panic, stunning market declines fan recession fears
https://www.washingtonpost.com/business/2020/03/09/coronavirus-panic-stunning-market-declines-fan-recession-fears/