24-hour match: 2x your gift’s impact today! Double my donation
COVID-19

Making sense of Monday’s market sell-off

Justin Ho Mar 10, 2020
HTML EMBED:
COPY
Traders work on the floor of the New York Stock Exchange on March 9, 2020 in New York City. Spencer Platt/Getty Images
COVID-19

Making sense of Monday’s market sell-off

Justin Ho Mar 10, 2020
Traders work on the floor of the New York Stock Exchange on March 9, 2020 in New York City. Spencer Platt/Getty Images
HTML EMBED:
COPY

The Dow Jones Industrial Average dropped 2,014 points Monday. That’s a 7.8% drop, the biggest since 2008. The S&P 500 fell 7.6%. Bond prices saw huge gains, with the 10-year yield dropping as low as 0.4% at one point.

The selling occurred across the board: big losses in tech stocks, financial stocks, consumer goods and services. Crude oil in New York dropped 20%, to around $31 a barrel on Monday.

COVID-19 is making demand for oil slow down. George Pearkes at Bespoke Investment Group says, at these prices, the cost of drilling in the U.S. might not be worth it. That means jobs are on the line.

“Manufacturing jobs related to everything from pipelines, to sand, to everything that needs to get done in the oil patch,” Pearkes said. “All the services jobs that go with it.”

The main market concern, though, is what happens if the outbreak, or restrictions involving the outbreak, bring economic activity to a crawl. Does the outbreak lead to fewer people eating at restaurants, going shopping or going to conferences, regardless of how cheap gas prices might be?

Monday happened to be the 11th anniversary of the bull market. If the S&P 500 falls an additional 1.4%, that bull run will have officially ended.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

Read More

Collapse

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.