U.S. stocks have already shed 30% from their recent highs in mid-February, but there could be more to go. Since last week, several states and large cities restricted business activity and non-essential movement. Almost 25% of Americans now live under some level of order to stay home, including New York, Las Vegas, San Francisco, Los Angeles, and Chicago.
As testing increased across the country, the number of U.S. coronavirus cases rose to more than 33,000 as of Sunday afternoon, up from about 3,600 a week earlier. Almost 400 people have died. Mayor Bill de Blasio claims hospital staff in New York City are 10 days away from running out of crucial supplies.
No one knows how bad the economic effects will be.
On Sunday, U.S. Treasury Secretary Steven Mnuchin said Congress was close to finalizing a relief package that would offer families a one-time $3,000 payment and markets another $4 trillion to support the economy. But lawmakers were still arguing about the particulars, and it was not clear when such a support measure might pass.
While fiscal stimulus and monetary policy measures would aid greatly in an eventual recovery of the U.S. economy, it would take time for them to have a large impact on Wall Street’s near-term performance.
Searching for a bottom, some analysts said things could eventually get as bad as the 2008-2009 meltdown, when stocks fell 57% and quarterly U.S. gross domestic product fell as much as 4% year-over-year.