The market is wrapping up a brutal quarter as investors search for a bottom in the fastest bear market ever amid the coronavirus crisis. The Dow Jones Industrial Average is on track to post its worst first quarter in history, but the recent sharp rebound raises the question if the worst is behind us. Here’s what’s happening:
3:25 pm: Sell-off accelerates in final hour of trading, Dow down 400 points
Stocks extended losses with roughly half an hour left in the session. The Dow dropped about 420 points, after rising 150 points at its session high. A 5.6% loss in American Express shares dragged the 30-stock benchmark down. The S&P 500 last traded 1.9% lower and the Nasdaq fell 1.5%. — Li
3:15 pm: Oil posts worst month and quarter on record
U.S. West Texas Intermediate crude rose 1.9% to settle at $20.48 per barrel on Tuesday, ending an otherwise bleak month and quarter on a high note. The contract posted its worst month and quarter on record, falling 54% and 66%, respectively. The coronavirus has led to soft demand for crude, just as OPEC nations including Saudi Arabia prepare to ramp up production, creating an oversupplied market. Tuesday’s bounce was in part due to a phone call on Monday between U.S. President Donald Trump and Russian President Vladimir Putin, in which they agreed to have top officials from both countries discuss the ongoing slump in oil prices, according to a report from Reuters. – Stevens
3:12 pm: Gold turned in its sixth straight positive quarter
- Gold settled down 1.57% at $1,596.6 per ounce, but the precious metal gained 4.83% in the first quarter, posting its sixth straight positive quarter.
- Orange Juice Futures closed up 20.5% this quarter, posting its best quarter since Q4 2015 when OJ gained 37.04%
- Palladium closed up 20.71% this quarter for its best quarter since Q3 2016 when palladium gained 20.78% — Francolla
3:05 pm: Final hour of trading: Dow falls, heads for biggest first-quarter decline ever
With roughly one hour of trading, the major averages were down broadly as Wall Street concluded a volatile start to 2020. The Dow was down more than 100 points, or 0.6%, bringing its quarterly losses to more than 22%. That would be the 30-stock average’s biggest first-quarter drop on record. —Imbert
3:03 pm: Fed action spurs companies to tap debt market for cash
The Fed’s commitment to buy corporate debt has unleashed a record wave of new debt from companies looking to fortify their cash positions as the economy plunges into a sharp recession.So far this week, about $50 billion in investment grade issuance has come to market,and YUM! Brands was able to price $600 million in high-yield debt, the first junk bond offer since March 4, according to Credit Flow Research. Last week’s $109.3 billion in investment grade issuance was a record. March is also on track to be a record month with about $258 billion in investment grade offers, topping the $177 billion from May, 2016, according to Credit Flow.”It’s all because the Fed has a lifeline to corporate America to issue debt,” said National Alliance’s Andrew Brenner. “These yields are significantly wider than normal. …They’re paying through the nose for it, but they’re raising money in a tough environment because they don’t know what the economy is going to look like in the next three months.”Visa, General Mills, and Ameriprise Financial were among companies with offerings Tuesday. Carnival, rated on the bottom BBB rung of investment grade, is looking for $3 billion in a U.S./euro bond deal this week. The deal is expected to price like a junk bond Wednesday.— Domm
2:42 pm: Treasury auctioning record amount of bills to pay for virus aid
The Treasury is auctioning a record amount of 4-week and 8-week bills Thursday, showing it is being aggressive and front loading debt to pay for fiscal stimulus to fight the coronavirus. The Treasury is offering $80 billion in 4-week bills, $20 billion more than last week and $10 billion higher than a record auction in 2018. The $60 billion in 8-week bills is $10 billion greater than its last largest. The Treasury is also offering $40 billion in 154-day cash management bills on Tuesday.”We only knew that there would be large amounts of issuances. It’s more a question of the scope and speed,” said Jon Hill, senior rates strategist at BMO. He said as the new issuance ramps up, it should start to pressure yields in the bill market which are still negative for some issues.Tom Simons, money market economist at Jefferies, said the increases are also due to the fact the government will not be collecting its usual revenues by April 15 because of the delay in income tax filing to July 15. — Domm
2:11 pm: Stocks, bonds not seeing big rebalancing impact as quarter closes
As the final hour of trading approaches, some traders are still watching for some big stock buying by pensions looking to rebalance their holdings. As stock prices fell this quarter, equity balances at pensions and other funds slipped. To rebalance, funds would buy stocks and sell bonds. The market’s not acting like there’s a ton of it,” said Michael Schumacher, director rates at Wells Fargo.
Some strategists said some of the rebalancing activity could be delayed while markets settle down, and some of the activity may already have occurred. “I do think the moves yesterday smelled like it,” said Schumacher. On Monday, stocks rallied, particularly late in the day and bonds sold off. On Tuesday, stocks were mixed and bond prices moved higher. Schumacher had expected about $20 billion would flow into the stock market. “You might see a little residual over the next couple of days,” he said. — Domm
2:09 pm: Builder stocks pop after Trump urges $2 trillion infrastructure plan
Shares of major building companies including metal production companies Freeport-McMoRan and United States Steel rallied in afternoon trading after President Donald Trump on Tuesday called on Congress to rekindle talks over a massive infrastructure bill. Trump urged lawmakers to provide some $2 trillion for funds for the repair of roads, bridges and railroads throughout the country as another way the federal government could act to boost an American economy struggling under the weight of the coronavirus. Eagle Materials rose 6.3%, Commercial Metals rallied 5.5%, United States Steel jumped 9.6% and Freeport-McMoRan popped 8.9% with nearly two hours left in the trading session. — Franck
1:58 pm: Billionaire investor Steven Cohen says to remain cautious
Point72 Asset Management founder Steven Cohen is reportedly advising his employees to remain cautious as markets recover some of their steep losses from the coronavirus-induced sell-off. “Markets don’t come back in a straight line; after an earthquake there are tremors,” Cohen wrote to staff on Friday in an internal memo seen by Reuters. “We need to continue to be disciplined. We are seeing plenty of opportunities to generate returns, but I don’t want us taking undue risks,” he added. The billionaire investor also said, according to Reuters, that his fund’s return for the year is basically flat, far outperforming the S&P 500’s 19% decline. –Stevens
1:53 pm: Stocks pressured by drop in banks, big spike in NY coronavirus cases
A decline in bank shares pushed the major averages lower along with a surge in coronavirus cases in New York. Citigroup, JPMorgan Chase and Bank of America all fell more than 1% as Treasury yields dipped. New York Gov. Andrew Cuomo said coronavirus cases in the state jumped by 14% overnight to more than 75,000. —Imbert
1:20 pm: Marc Lasry says Avenue Capital lent a company money at 20% interest
Avenue Capital’s Marc Lasry said his firm recently lent money at 20% interest, an indication credit markets are still facing challenges. A few weeks ago they would have charged 15%, Lasry said. “We should not be able to charge 20%. That means there’s still issues in the market. As that starts coming back down to 10 to 15%, that will let you know that the market is normal,” Lasry said on CNBC’s “Halftime Report.” —Stankiewicz
1:00 pm: US gasoline prices are below $2 per gallon on average for first time in four years
For the first time in four years, the national average for a gallon of gas in the U.S. is below $2, AAA said in a statement Tuesday. At $1.99, the current average price for a gallon is 18.4%, or 45 cents, lower than a month ago, and down 70 cents, or 25.8%, year-over-year. With more and more people staying home amid the coronavirus outbreak, AAA expects ongoing demand reductions to drive prices even lower. The association sees the national average for a gallon of gas falling to $1.75 or less in April. – Stevens
12:05 pm: Brutal first quarter for Asian and European markets
- Japan’s Nikkei ends Q1 down 20.04% for its worst quarter since Q4 2008 when the Nikkei lost -21.32% and its worst Q1 since 1990 when the Nikkei lost 22.96%
- Shanghai lost 9.83% for its worst quarter since Q4 2018 when Shanghai lost -11.61% and its worst Q1 since 2016 when Shanghai lost 15.12%
- S Korea KOSPI lost 20.16% for its worst quarter since Q4 2008 when the KOSPI lost 22.35% and its worst Q1 ever
- India SENSEX lost 28.57% for its worst quarter and Q1 ever
- Euro STOXX 600 is down 23.1% for its worst quarter since Q3 2002 when the Euro STOXX 600 lost 23.34% BUT its worst Q1 ever (back through 1987)
- German DAX closed down 25.01% QTD for its worst quarter since Q3 2011 when the DAX lost 25.41% BUT its worst Q1 ever
- Italy’s FTSE MIB closed down 27.46% for Q1 for its worst QTR ever and worst Q1 ever
- UK FTSE 100 lost 24.8% in Q1 for its worst quarter since Q4 1987 but is worst Q1 ever — Francolla
11:50 am: Markets at midday: Stocks turn around, Dow now up more than 100 points
Around midday, the major averages had erased their losses from earlier in the session as investors try to end a dismal quarter on a high note. The Dow is up more than 100 points, or 0.6%. The S&P 500 traded 0.5% higher while the Nasdaq advanced 0.9%. Still, the Dow was headed for its worst first-quarter performance ever. —Imbert
11:17 am: Job vacancies contract as coronavirus slowdown intensifies
Job opening, which at one point had outnumbered available workers by more than a million, are starting to contract as the coronavirus freezes economic activity. The number of available positions fell by nearly 9% over the past week, according to Glassdoor, with the drop particularly acute in consumer-related services and trade and transportation. Travel and tourism openings fell by 44.6% and arts and entertainment dropped 30% during the period. Two bright spots: Health care openings rose by 1% and salaries were up 3.1% in March from the same period a year ago. Still, half the employers either were freezing or reducing openings, according to Glassdoor’s analysis of online job openings. – Cox
10:45 am: Goldman sees 15% jobless rate and 34% GDP decline, followed by the fastest recovery in history
Goldman Sachs has revised its view for how the coronavirus will impact the U.S. economy, seeing a sharper downturn than originally thought followed by an even bigger upturn. Among its expectations are that the unemployment will peak around 15% later this year, well above original expectations for 9%. Gross domestic product is forecast to fall 9% in the first quarter followed by a stunning 34% plunge in the second quarter that would be by far the worst period in post-World War II history. –– Cox
10:32 am: Analysts are still finding stocks to buy like Wendy’s and HP on hopes the market has bottomed
- Wedbush upgraded Wendy’s to outperform from neutral.
- Wells Fargo upgraded Dollar General to overweight from equal weight.
- Argus upgraded HP to buy from hold.
- Barclays upgraded Sanderson Farms to overweight from equal weight.
- Berenberg upgraded Box to buy from hold.
- Gordon Haskett upgraded Cheesecake Factory to buy from hold.
- Atlantic Equities downgraded Honeywell to neutral from overweight.
- Berenberg downgraded Teladoc Health to hold from buy. — Bloom
10:22 am: Stocks turn positive
The three major indexes all pushed into the green as White House health advisor Dr. Anthony Fauci expressed some mild confidence that the U.S. efforts to combat the coronavirus were working and consumer confidence topped expectations. Fauci told CNN in an interview that he could see “glimmers” that social distancing was having the desired effect in the country and that he thought the U.S. would be well prepared to deal with a possible second wave of the virus in the fall. — Pound
10:01 am: Chicago PMI tops expectations
The Chicago PMI came in at 47.8 for March, well above the 40.0 projected by economists, according to Dow Jones. The reading still signaled a contraction in business activity because it was below 50. The Chicago PMI in February was 49. — Pound
9:31 am: Dow opens 100 points lower
The Dow fell about 100 points at the open as the 30-stock average headed for its worst quarter since 1987 and its worst first quarter ever. Losses in UnitedHealth and JPMorgan shares weighed on the blue-chip benchmark. The S&P 500 is down 0.6%, on track for its worst quarter since 2008 and its worst first quarter since 1938. The Nasdaq Composite dipped 0.5% at the open. — Li
9:01 am: ‘It’s time in the market, not timing the market’
Bank of America Vice Chairman Keith Banks warned investors Tuesday against getting clever and trying to time the stock market. “The reality is, it’s time in the market, not timing the market” that proves most lucrative over the long term, he said on CNBC’s “Squawk Box.” Banks, also head of BofA’s investment solutions group, said he’s advising clients to begin adding risk their portfolio and return to “a more normalized level of equity exposure.” —Stankiewicz
8:51 am: Goldman’s list of stocks for ‘income-oriented’ investors as dividends come under pressure
Goldman Sachs expects the S&P 500 dividend payout to drop 25% this year as the coronavirus pandemic wreaks havoc on corporate profits. Still, the bank managed to identify 40 stocks offering high dividend yields and security of payouts for “income-oriented” investors. “With 10-year US Treasury yields at 0.8%, income-seeking investors should consider stocks with both high dividend yields and the capacity to maintain the distributions,” said Cole Hunter, Goldman’s U.S. portfolio strategist. Goldman’s list of stocks with safe dividends include media company Omnicom, which pays a 5% dividend yield, and IBM, which offers a 6% yield.—Li
8:45 am: Fed extends repo program to other central banks
The Federal Reserve has opened its short-term lending program with commercial banks to other central banks around the world. In an announcement Tuesday morning, the Fed said it was extending its repo program, which provides cash infusions in exchange for high-quality collateral, to central banks and other international authorities with accounts at the New York Fed. The program is expected to last six months. The cash that participants receive can be spread to institutions within those regions that then can be loaned out to individuals and businesses. “This facility should help support the smooth functioning of the U.S. Treasury market by providing an alternative temporary source of U.S. dollars other than sales of securities in the open market,” the Fed said in a release. The coronavirus crisis has generated huge global demand for dollar-denominated assets that the Fed also has facilitated through dollar swaps with other central banks around the world. –Cox
8:21 am: Payment volume falls in March for U.S. and cross-border, Visa says
Shares of Visa moved slightly lower on Tuesday morning after the company released updated information for its first and second quarters. U.S. payments volume was down 4% for the first four weeks of March, compared with last year, but the volume for the first quarter was still up 9%. Cross-border volume has taken a much bigger hit during the coronavirus crisis, down 19% in March. The payments company said it expects net revenue to grow in the mid-single digits in the second quarter. The stock has held up better than the broader market during 2020, down just 11% for the year. —Pound
8:12 am: Domino’s Pizza withdraws 2020 guidance
Shares of the pizza chain Domino’s sunk more than 7% in premarket trading on Tuesday after the company withdrew its 2020 financial guidance. “Due to the current uncertainty surrounding the global economy and the Company’s business operations considering COVID-19, the Company is withdrawing its fiscal 2020 guidance measures related to general and administrative expenses, capital expenditures, store food basket pricing and the impact of foreign currency on royalty revenues,” the company said. Domino’s has kept many U.S. locations open during the pandemic but many international stores remain closed. —Fitzgerald
8:04 am: Coronavirus update: Global cases exceed 800,000
The coronavirus continues to spread across the globe, with cases worldwide topping 800,000, according to Johns Hopkins. Global deaths reached more than 38,000. Infections in the U.S. amount to more than 164,000 and deaths in America rose about 3,000. Spain’s death toll reached 8,189, up from 7,340 the day before, the country’s health ministry said. Iran’s death toll from coronavirus has reached 2,898, with 141 deaths in the past 24 hours, the country’s health ministry spokesman Kianush Jahanpur told state TV, Reuters reported. —Fitzgerald
7:45 am: Oil jumps after falling to lowest level in nearly two decades
Oil prices jumped on Tuesday, one day after dropping to the lowest level since 2002. U.S. West Texas Intermediate crude gained 7.8%, or $1.57, to trade at $21.66 per barrel, while international benchmark Brent crude rose 4.22% to $23.72 per barrel. WTI is on track for its worst month ever after falling 55%, as crude continues to get hit on both the demand and supply side. The coronavirus outbreak, which has halted travel and slowed business activity, has weighed on demand, while a price war between Saudi Arabia and Russia means the market could soon be flooded with excess oil. The OPEC+ production cuts currently in place expire today, and Saudi Arabia is among the nations that has said it will ramp up production. Amid oil’s decline, on Monday U.S. President Donald Trump and Russian President Vladimir Putin held a phone call in which they agreed to have top officials from both countries discuss slumping prices, according to a report from Reuters. —Stevens
7:40 am: Futures are flat as Dow wraps up worst first quarter in its history
U.S. stock futures rested along the flatline on Tuesday as Wall Street took a breather following strong gains in the previous session. Dow Jones Industrial Average futures were down 24 points, or 0.1%. S&P 500 futures were also down slightly while Nasdaq 100 futures traded marginally higher. The major stock averages rallied more than 3% each on Monday amid optimism around extended social distancing guidelines in the U.S. and Johnson & Johnson identifying a vaccine candidate for the coronavirus. Despite the recent comeback, the market is on pace to end the month and quarter with big losses:
- The Dow is down 12% in March, on pace for its worst month since October 2008.
- The S&P 500 is down 11% in March, also on pace for its worst month since 2008.
- The Dow is down 21.8% this quarter, on track for its worst quarter since 1987 and its worst first quarter ever.
- The S&P 500 is off 18.7% this quarter, on track for its worst quarter since 2008 and its worst first quarter since 1938. —Imbert
—CNBC’s Patti Domm, Thomas Franck, Gina Francolla, Michael Bloom, Kevin Stankiewicz, Jesse Pound, Jeff Cox and Yun Li contributed reporting.
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