The Standard & Poor’s 500 closed down 1.21% today and the Dow Jones Industrial Average dropped 0.59%. The NASDAQ Composite was lower by 2.45% and the NASDAQ 100 fell 2.54%. The Russell 2000 small cap index tumbled by 1.96%.
The rising tide of new coronavirus infections both in the United States–where Thursday’s total new infections hit 90,000–and Europe has caused the financial markets to worry that the economy is about to get gut-punched again by shutdowns designed to slow the spread of the pandemic.
And increasingly those fears seem justified as cities, states, and entire countries announce economic restrictions.
Yesterday, the news came from Germany and France as the two announced targeted shutdowns.
Today, the European news comes from Belgium. The country announced a second national lockdown, effective today, that is much more sweeping than what we’ve seen from France, Germany, Italy or Spain. The national government and the country’s states decided to close all non-essential businesses for six weeks from Monday, including hairdressers. Supermarkets will only be allowed to sell essential items. Only one visitor will be allowed in each household and gatherings in public places will be restricted to four people. The current midnight to 5 a.m. curfew will continue and bars and restaurants will remain shut. Schools will, however, reopen on 16 November after an extended half-term break. Belgium has the highest number of coronavirus cases per 100,000 people in all of Europe.
Back in the United States, Chicago has rolled back its re-opening schedule. Governor J. Pritzker has ordered renewed restrictions on indoor dining in reaction to an increase in the city’s rate of the seven-day moving average of test positivity rates to 7.8% For Illinois, as a whole, seven of 11 regions, with a population of 8 million or 64% of the state’s people, will soon face a rollback in economic re-openings. The restrictions on indoor dining in Chicago come as the city gets set for its usual freezing winter weather that makes outdoor dining just about impossible.
And San Francisco, one of the most successful cities in California at containing the coronavirus, has put plans to expand indoor capacity to 50% from 25% at restaurants, movie theaters, museums and places of worship, along with reopening indoor pools, gym locker rooms and bowling alleys. The city’s test-positivity rate is still less 1% but infections are starting to rise.
On Sunday, New York was scheduled to increase indoor dining capacity to 50% from 25%. But there has been no word on whether those plans will go ahead.
Selling based on these fears isn’t taking any prisoners. Stocks were down in pretty much every sector with Facebook (FB) and Apple (AAPL) and Amazon (AMZN) dropping 6.3%, 5.6%, and 5.5%, respectively. Solar stocks such as SolarEdge Technologies (SEDG) and SunRun (RUN), which had been racking up steady gains in anticipation of a Democratic victory (and new initiatives to combat global warming) fell 4.59% and 4.13%.
In some cases it looked like sellers were simply dumping recent favorites to reap profits. TelaDoc Health (TDOC), for example, gave up 9.84%. PayPal (PYPL) fell by 4.6%.
Today emerging markets didn’t provide a place to hide. The iShares MSCI Emerging Markets ETF (EEM) slid 1.19%. The iShares MSCI Brazil ETF (EWZ) was lower by 2.36%.
Gold stocks, which had been lower in recent sessions on strength in the U.S. dollar, gained today with Barrick Gold (GOLD) up 2.1% and the VanEck Vectors Gold Miners ETF (GDX) picking up 1.68%.