Stocks halted after major loss, 10-year nears zero
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11:11 am: Goldman economist says Fed will cut back to record low
Goldman Sachs chief economist Jan Hatzius said in a note to clients that he expects the Federal Reserve to slash its benchmark interest rate by another 50 basis points at its meeting this month and then cut again in April, bringing the rate back to its record low range of 0% to 0.25%.
“We now expect a 50bp cut, in part because the bond market is already priced for a large move and the FOMC will likely be reluctant to risk further tightening in financial conditions by refusing to deliver. We are also penciling in a final 50bp cut at the April 28-29 meeting,” Hatzius said. — Pound, Bloom
10:54 am: Trump blames oil price war and the media for stock rout
President Donald Trump said in a series of tweets Monday that falling oil prices were good for consumers, while he blamed the media and Russia and Saudi Arabia “arguing over the price and flow of oil” for the massive sell-off in stocks. — Li
10:47 am: Fed’s ramped-up bank-funding operation to fund banks sees big demand
The first day of the Federal Reserve’s expanded operation to provide short-term funding for the financial system saw high demand. The New York Fed accepted $112.9 billion of bids after announcing earlier in the morning that it was increasing overnight offerings from $100 billion to at least $150 billion. Fed officials say they are conducting the operations to keep short-term interest rates within their targeted range. The extended repo operations started after market tumult in September that briefly sent rates shooting higher. – Cox
10:33 am: Breathtaking pace for this decline
Market research maven Jim Bianco points out how rapid this decline has been. Outside of market crashes, this could be among the fastest ever collapses into a bear market, which would be a decline of 20% from highs. “The S&P 500 is down 17% to 18% from the February 19, 2020 all-time high. That was just 13 trading ago,” Bianco writes in a tweet. —Melloy
10:30 am: Stocks rebound slightly after halt
The major indexes have rebounded off their lows following the 15 minute halt shortly after trading began. The Dow Jones Industrial Average has posted a loss of about 1,400 points so far, or roughly 5.6%. The S&P 500 and Nasdaq Composite have also fallen more than 5% on Monday morning. — Pound
10:13 am: Walmart in the green
Walmart bucked the broader market’s trend on Monday, trading positive amid the broader market’s selloff. Walmart is the only stock in the Dow Jones Industrial Average that’s in the green. Lower gas prices means more hands in the money of consumers, which could boost foot traffic and sales at a major consumer company like Walmart. Plus, the big box retailer might get relief on what it pays suppliers to get goods to and from its stores. Walmart last traded up 0.25%. — Fitzgerald
10:05 am: Banks getting killed
Shares of bank stocks suffered big losses on Monday amid a collapse in bond yields. Shares of Citigroup are down more than 10%, JPMorgan lost 9%, Goldman Sachs fell 8% and Bank of American dropped 8%. Overnight on Monday, the the yield on the benchmark U.S. 10-year Treasury briefly touched an all-time low of 0.318%. Low interest rates can hurt bank’s net interest margins. — Fitzgerald
9:49 am: Stocks reopen, S&P 500 down 7%
Stocks reopened after halting for 15 minutes following the S&P 500 hitting a threshold triggering the circuit breaker. The S&P 500 fell more 7%. The Dow Jones Industrial Average fell 1,980 points and the Nasdaq Composite fell 7.3%.
The three major averages are close to intraday bear market territory, meaning they would be 20% from their 52-week high. The S&P 500 is down 17.8% for its 52-week high. The Dow is 19.1% off its most recent high and the Nasdaq is 18.8% off its high. — Fitzgerald
9:34 am: Stocks halted, S&P 500 circuit breaker kicks in
The S&P 500 fell 7% shortly after the open, triggering the circuit breaker meaning it’s now halted. Stocks will be halted for 15 minutes. – Stevens
9:30 am: Stocks plummet more than 6%, Dow drops more than 1,700 points
Stocks cratered at the open with all major averages down more than 6%. The Dow Jones Industrial Average dropped nearly 1,800 points. – Stevens
9:15 am: ‘Circuit breaker’ may stall or halt trading in market plunge
A volatile market may trip key circuit breakers that would limit or halt trading today. According to the New York Stock Exchange, if the S&P 500 drops 7%, trading will pause for 15 minutes. If it drops 13% on or before 3:25 p.m. ET, trading will pause for 15 minutes. And if it plunges 20%, trading will halt for the rest of the day. These triggers, designed to maintain orderly trading after the May 2010 flash crash, have never been triggered before. But CME-traded stock index futures sank 5% Sunday evening, halting trading. – Lewis
8:42 am: Here’s where we stand with under an hour before the open
Futures on the three main U.S. indexes hit the limit down levels, falling about 4.8%, but premarket trading of several ETFs indicate that stocks could drop further once trading begins. The SPDR S&P 500 ETF is down 7.2%, with the SPRD Dow ETF is 6.9%. Oil has rebounded slightly off its lows, with the WTI April futures contract trading at $32.17 a barrel, a 22% decline. — Pound
8:31 am: Boot Barn down double digits
Western and workwear retailer Boot Barn is down more than 11% in premarket after a downgrade from JPMorgan and amid rising concern about the oil industry. Roughly a third of the company’s stores are in major oil and gas producing regions, with 25% in Texas alone. JPMorgan downgraded the stock to neutral from overweight, lowering its price target on the stock to $32 per share from $47. Premarket trading of the stock is light, however, with fewer than 2,000 shares changing hands so far. — Pound, Reagan
8:24 am: US 10-year yield hits new record of 0.318% amid flights to bonds
The yield on the U.S. 10-year Treasury briefly touched an all-time low of 0.318% in overnight trading, adding another 30 basis points to an unprecedented fall in the key interest rate. The benchmark yield resumed its historic slide on Monday as investors continued to punish risk assets like stocks in favor of the safety of bonds between an all-out oil price war and contagion fears surrounding the coronavirus.
The 10-year yield, in particular, holds outsized importance in the U.S. economy for its use as a benchmark for mortgage rates and auto loans. That rate was above 1.5% as recently as mid-February. — Franck
8:21 am: Energy and gig economy stocks plunging in premarket trading
The shares of some major names are down double digits in premarket trading. Oil giants Exxon and Chevron both fell more than 15%. Uber and Lyft are both down about 12% amid concern that demand will fall due to the coronavirus. Tesla, which was trading at more than $900 per share less than a month ago, is down 14% this morning to about $605 per share. Boeing fell more than 9% after the Wall Street Journal reported that regulators will order the company to make changes to electrical wiring in the grounded 737 Max. — Pound
7:59 am: El-Erian: Stocks could end up down 20%-30% when the bottom is finally reached
Economist Mohamed El-Erian told CNBC’s “Squawk Box” on Monday that the U.S. stock market may drop as much as 30% from last month’s record highs before finding a bottom. “This is going to be treacherous for a while,” the chief economic advisor at Allianz said. “I would advise most retail investors to stay on the sidelines, not panic. There will be opportunities but they’re not now,” he said. The Dow, as of Friday’s close, was 12.5% off last month’s all-time highs. The Dow was tracking for an over 5% drop at Monday’s open on Wall Street. – Belvedere
7:53 am: Bank stocks crushed by one-two punch of dropping yields and crashing oil
Bank stocks plunged in early trading with Bank of America dropping 11% and JPMorgan Chase falling 9%. The banks now have two problems. First, plunging yields are ruining their lending margins. And now oil prices are crashing, which could cause many energy companies to default on their obligations to banks. – Melloy
7:44 am: Cramer: Collapse of oil prices and bond yields is worse than ‘the chaos of 2007-2009’
CNBC’s Jim Cramer said early Monday that the collapse in oil prices and bond yields put the stock market in “uncharted waters” as Dow futures were pointing to a 1,300-point nosedive at Wall Street’s open. As crude futures were plunging Sunday night after OPEC’s production cut deal failed and the 10-year Treasury yield was making shocking new lows in a global flight to the perceived safety of bonds, Cramer tweeted that these moves are “signalling an imminent recession.” – Belvedere
7:23 am: Gold hits seven-year high
Amid a massive sell-off in stock futures, oil prices tanking and bond yields plunging to record lows, gold prices hit a more than seven-year high on Monday. In a volatile session, spot gold touched its highest since December 2012 at $1,702.56, as concerns over the coronavirus outbreak and its economic impact drove investors to safe-haven assets. Profit-taking later unwound much of the metal’s rise, knocking the precious metal back to stand 0.2% higher at $1,676.68 per ounce. – Fitzgerald
7:12 am: Over $26 billion wiped off cryptocurrency market in 24 hours
Cryptocurrency markets plunged following a plummet in oil prices and a massive sell-off in stock futures. The market capitalization or entire value of cryptocurrencies was down $26.43 billion from a day earlier, according to data from Coinmarketcap.com, and the sell-off worsened as the day went on. Bitcoin, the biggest cryptocurrency by value, fell more than 10% in 24 hours around the same time. – Stevens
7 am: Bank of America says stocks have not been this attractive since the 1950s
“Stocks have not been this attractive vs. bonds since the 1950s” Bank of America’s Savita Subramanian said in an early morning note to clients. “The prior three peaks were followed by the S&P 500 outperforming the 10-yr Treasury by a remarkable 31ppt on average over the subsequent 12 months. And since 1951 when the ratio was this high, stocks have returned 19x more than the Treasury,” she said. – Bloom
6:43 am: Market is now expecting the Fed to cut short-term rates to zero this month
Less than a week after it implemented an emergency rate cut, markets now expect the Federal Reserve to soon take its benchmark rate back to zero, where it was during the financial crisis. The fed funds futures market is assigning a 73.5% probability to a 100 basis point cut in March, according to the CME’s FedWatch tracker. There was a 0% probability of that happening as of Friday, but the weekend’s market events changed that. The Federal Open Market Committee meets March 17-18, but the central bank could act before then. – Cox
5:45 am: Major averages set to crater 5% at the open, Dow on track for 1,300-point drop
Monday is shaping up to be a bloodbath on Wall Street. U.S. stock futures are indicating a 5% drop for the major averages at the open, with the Dow set to decline more than 1,300 points.
The sharp move lower comes as investors brace for the economic fallout from the spreading coronavirus, while a shocking all-out oil price war added to the anxiety.
The sharp declines in the futures market signaled more turbulence ahead after a roller-coaster week that saw the S&P 500 swing up or down more than 2.5% for four days straight. – Stevens
— CNBC’s Maggie Fitzgerald, Matt Belvedere, Jess Pound, Thomas Franck, Al Lewis and John Melloy contributed reporting.
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