1. Dow set to sink again after biggest point-loss ever
Traders work during the opening bell at the New York Stock Exchange (NYSE) on February 27, 2020 at Wall Street in New York City.
Johannes Eisele | AFP | Getty Images
U.S. stock futures were pointing to a 300-point decline for the Dow Jones Industrial Average at Friday’s open on Wall Street, pushing blue chips further into a correction. However, Dow futures had been down 600 points earlier in the morning. Fears of a possible coronavirus pandemic crushed stocks this week, with the Dow off more than 11% and tracking for its worst weekly performance since the 2008 financial crisis. The Dow finished at a record high just 11 sessions ago on Feb. 12. As of Thursday’s close, it was down nearly 13% since then. Thursday’s nearly 4.4% decline for the Dow was the worst day back to February 2018. The Dow’s nearly 1,200 point plunge Thursday was its worst point-loss ever.
2. 10-year Treasury yield collapses to another record low
Investors are dumping global stocks as well, with markets from Europe to Asia down 3% to 5%, and they’re pouring money into the perceived safety of bonds. The 10-year U.S. Treasury yield, which moves inversely to price, hit another record low below 1.2%. The 10-year yield serves as a benchmark for mortgage rates, auto loans, student loans, credit card annual percentage rates and other debt instruments. The yields on the 2-year and 5-year Treasurys were trading below 1% early Friday. Global markets have lost $6 trillion in value over the past six days, according to S&P Dow Jones Indices.
3. Market expectations of Fed rate cut increasing
The carnage in stocks and plummeting Treasury yields are raising market expectations of a Federal Reserve interest rate cut. Ex-Fed Gov. Kevin Warsh told CNBC on Friday he sees a coordinated global central bank action soon in response to coronavirus. Before the outbreak, the Fed was telling the market it planned to hold rates steady for a while after three cuts of 0.25% each last year. A Fed official during the financial crisis in 2008, Warsh has been critical of Fed officials for not normalizing interest rates sooner and thus leaving themselves more room to act in times of crisis.
4. WHO warns coronavirus could reach every country
The World Health Organization on Friday reiterated its warning that COVID-19 could reach every country on Earth. On Tuesday, the WHO had warned countries around the world to be prepared for the coronavirus to be “literally knocking at the door.” Infections continued to rise in hot spots outside of China — in South Korea, Iran, the U.K., Germany and Italy. The U.S. has about 60 cases. The vast majority of infections and deaths are still in China, where officials increased the count of confirmed cases to nearly 79,000, with fatalities approaching 2,800.
5. Biden looks to South Carolina and then Super Tuesday for comeback
Joe Biden leaving a campaign event in Georgetown, South Carolina on Feb. 26, 2020.
Tucker Higgins / CNBC
Heading into Saturday’s South Carolina primary, former Vice President Joe Biden was leading in the polls after poor results in Iowa, New Hampshire and Nevada. A political action committee backing the embattled former front-runner for the Democratic presidential nomination invested in key Super Tuesday states. Biden is third so far in the delegate count, behind Sen. Bernie Sanders and Pete Buttigieg. Mike Bloomberg, a latecomer to the race, will be on ballots for the first time on Super Tuesday, when a third of the party’s delegates are up for grabs.