Finance Monthly March 2020 Edition

8 www.finance-monthly.com NEWS - MONTHLY ROUND-UP THE MONTHLY ROUND-UP News You Can’ t Af ford to Mi ss the S&P 500 have resulted in healthy rebounds, particu- larly when the larg- est drop happens on a Monday. However, both analysts and investors are highly sceptical moving for- ward, and the next few weeks should give some indication of how stocks will play out in the wake of coronavirus’ fu- rore. The Dow Jones fell to its worst point in the past two years, putting it at its third worst drop point in history, as corona- virus spreads and elicits panic among investors. The news comes as no surprise given the state of play, but as the Dow Jones hits its third-worst point in history, investors are waking up to the prospect that this may be just the be- ginning of what’s to come. Some economists are warning that the pandemic could push the Bank of Canada and the US Federal Reserve to consider cutting interest rates sooner rather than later; a clear sign of more to come. Ben- jamin Tal, Deputy Chief Economist at CIBC Capital Markets, told The Financial Post: “It is reason- able to assume that coronavirus is going to last longer given the infection rate is higher than SARS and is still climbing. That itself might convince the Bank of Canada and even the US Fed to cut interest rates. I wouldn’t be sur- prised”. “This is just the begin- ning of coronavirus, and there is a con- sensus starting to be generated that may- be, it will last longer than expected.” In terms of num- bers, the Dow Jones Industrial Aver- age dropped 1,031 points, or 3.56% on Monday 24th Febru- ary, while the S&P 500 plunged 3.3%, the biggest drop since last August. Global demand for oil has stalled, leav- ing the price to fall as much as 4%. The price of gold, on the other hand, went up, as investors attempt to put their money where it’s safe. According to Frances Donald, Chief Econ- omist at Manulife Investment Man- agement: “The virus spread comes at a time when compa- nies are already fac- ing significant inven- tory restocking and a stalling in global manufacturing fol- lowing the applica- tion of tariffs and overall trade ten- sion…Coronavirus is adding salt to the wound”. The good news is that based on past research from the Bespoke Investment Group, over the past 11 years, declines of more than 2% for Dow Jones Drop is Just The Beginning of Coronavirus Damage