Stocks were poised to extend losses Monday as the coronavirus pandemic deepened over the weekend, with the U.S. death total escalating.
On Sunday evening, futures for the Dow Jones industrial average fell more than 400 points, signaling another volatile week on Wall Street after it tumbled more than 900 points on Friday. Standard & Poor’s 500 futures lost 2%.
President Donald Trump late Sunday extended the national social distancing guidelines to April 30 as U.S. fatalities from the pandemic climbed above 2,300. The announcement comes after Trump said last week he hoped to open up the country by Easter. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, projected between 100,000 and 200,000 people could die from the virus.
The stock market has shed more than 20% since touching records just over a month ago. Despite Friday’s losses, the Dow still notched its biggest weekly gain since 1938, helped by promises from Congress and the Federal Reserve to provide aid for the economy and markets. But analysts caution that the recent rally could fade until there’s a long-term solution to fight coronavirus infections.
“Volatility will likely persist,” says Rusty Vanneman, chief investment officer at Orion Advisor Solutions. “It’s a race against the clock right now. Hopefully, we can get some positive data on the infection rates peaking in the next few weeks.”
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Investors are looking for the number of infections to slow before markets can find a bottom, analysts say. Last week, the U.S. topped China as the global leader in virus cases.
“Investors want to see the curve of virus cases flatten,” says Michael Lackwood, founding principal of New York-based Spring Delta Asset Management. “That’s what will inspire people and get businesses back to work, which will help the economy restart again.”
More than 710,000 people are known to have been infected with the virus globally, and more than 33,000 have died. The U.S. counted more than 136,000 cases of coronavirus by Sunday afternoon, the world’s highest total, and there were nearly 2,400 deaths, according to the Johns Hopkins University data dashboard. More confirmations are expected as the U.S. continues to ramp up testing for the virus.
On Friday, Trump signed an unprecedented $2.2 trillion economic rescue package into law to support companies and help struggling families.
Looking ahead, investors will monitor jobs and manufacturing data this week for further signs on how the pandemic has affected the U.S. economy. The March jobs report is set to be released Friday.
The Institute for Supply Management, meanwhile, will release its March manufacturing survey on Wednesday, which could provide clues into how supply chain disruptions have impacted factory activity.