The main indexes of Wall Street were down more than 3% today as the number of coronavirus cases in the US surpassed China.
A 3.9% drop in Dow resulted in breaking its 3-day winning streak but it is still on its way to its best week since 1938 while the S&P 500 which is down 3.6% is on track to its best weekly performance since 2009.
However, yesterday, the Wall Street Journal put out, “A new bull market has begun. The Dow has rallied more than 20% since hitting a low three days ago, ending the shortest bear market ever,” that has the crypto community comparing it with the crypto market.
Although, a textbook definition of a bull market, as Investopedia states, “the most common definition of a bull market is a situation in which stock prices rise by 20%, usually after a drop of 20% and before a second 20% decline,” the market has been on a rollercoaster for the past few days recording high percent of losses and gains regularly.
Reportedly, a jump of 6.4% ended the 11 days “shortest in history for the Dow” bear market.
Besides stocks, oil has also been plummeting since the price war started by the lack of agreement between Saudi Arabia and Russia. The oil prices have fallen so much that the shipping cost of Canadian heavy crude is more than the value of the oil itself.
Interestingly, the $2 trillion stimulus bill has been finally passed but the markets aren’t reacting.
We have less than five days left in the first quarter of 2020 and the COVI-19 pandemic situation is continuing to get worse with several countries in lockdown. US consumer confidence has also dropped to its lowest level in three years this month, as per the data provided by the University of Michigan.
“The outlook for the national economy for the year ahead weakened dramatically in March, with the majority now expecting bad times financially in the entire country,” said the survey director in a statement.
On Thursday, the US government reported that a total of 3.28 million people filed for unemployment insurance in the week ended March 21st, a level surpassing those reported since 1967.
“This morning’s data leaves no doubt that the economy is currently in a recession,” said Deutsche Bank AG’s chief U.S. economist Matthew Luzzetti.
The current situation economist and trader Alex Kruger said, is the world acting like crypto.
“In 2020 the world has gone full crypto. Full crypto you know. In crypto half the people think prices will “moon”, while the other half think it’s all a ponzi. In the world now half the people think coronavirus is a sham, while the other half think everything will collapse,’ said Kruger.
With volatility “up the roof,” every stock is trading like a “sh*tcoin” and assets can’t be valued any longer because nobody knows anything, and everybody is under lockdown and either unemployed or working from home. Sounds very much like crypto to me,” the trader said.