The averages plunged 7% to begin the day, setting
off a 15-minute circuit breaker. About 10 minutes after re-opening, the
Dow, S&P, and Nasdaq are down about 6%.
Oil is lower by 20.1% to $32.75. Gold is up only 0.45% to $1,680.
The 10-year Treasury yield is down 28 basis points to 0.49%.
Checking oilfield names, they’re trading as if
black gold will no longer be necessary for the modern existence the
globe has gotten used to. Schlumberger, Halliburton, and Marathon Oil –
to name three – are all down in the area of 40%.
AbbVie (NYSE:ABBV) announces that
it is working with global health authorities, including the FDA, CDC,
BARDA, NIH and Chinese officials, to determine if HIV med Kaletra/Aluvia
(lopinavir/ritonavir) is effective in treating COVID-19, the current
coronavirus outbreak.
It has donated Aluvia to the Chinese government
for experimental use but apparently does not have access to clinical
information thus far.
The company is “closely monitoring” manufacturing
and supply chain resources worldwide to ensure supply for HIV patients
as well as COVID-19 use.
Shares down 6% premarket on light volume as most biotech and biopharma players are in the red before the open.
Equities trading is halted for 15 minutes after the S&P 500 plunges 7% at the open.
The Dow sinks 7.3% and the Nasdaq falls 6.9%.
Trading is set to resume at 9:49 AM ET.
Update at 9:47 AM: About a third of the S&P
500 didn’t trade before the NYSE halted trading, according to Bloomberg.
That implies more pain when trading resumes in a minute.
U.S. Treasury yields plunge across the board
to record lows, with the entire curve briefly trading below 1% for the
first time in history, exacerbated by an oil price war on top of
deteriorating global equity markets.
A few minutes ago, 10-year yields had dropped as
much as 28 basis points to 0.48%, while the 30-year fell to 0.99% and
the two-year yield shed 18 bps to 0.33%.
“The market is panicking,” Shinji Hiramatsu,
senior investment manager at Sompo Japan Nipponkoa Asset Management in
Tokyo, tells Bloomberg. “Position adjustment, loss-cut buying and all
sorts of buying are emerging. Everybody’s buying Treasuries.”
Early selling of S&P 500 futures triggered CME rules that prevent drops of more than 5% from the previous trading-day’s low.
Futures sank 5% to 2,819 at 8:05 p.m. ET, hitting
their overnight limit. The contract can’t trade at a lower price for the
remainder of the overnight session; transactions at or above that
threshold are allowed.
The last time futures tripped the limit-down rule
was Nov. 8, 2016, the night that Donald Trump won the U.S. presidency.
After hanging around at the limit-down price for about 30 minutes,
futures turned higher and ultimately went positive minutes after the
opening of the regular trading.
Nasdaq futures will stop falling if the contract reaches 8,093.25. Dow futures trigger curbs at 24,534.
“It allows cooler heads to prevail, particularly
in the overnight sessions it’s a good thing to have because you just
don’t have as many products at work. This is one rule that it’s been so
long since we have seen it, but it’s proved effective over time,” JJ
Kinahan, chief market strategist at TD Ameritrade, told Bloomberg.
Once the market opens, NYSE circuit breakers work
like this: trading halts for 15 minutes if the S&P 500 falls 7% (to
2,764) at any time before 3:25 p.m. ET. Another 15-minute pause is
triggered if losses reaches 13% (2,586). If the decline hits 20%
(2,377.9), markets will close for the day. With the exception of the
final rule, circuit breakers are suspended during the final 35 minutes
of trading.
The Trump administration is making sure public and private insurers
will pay for COVID-19 screening tests, Vice President Pence announced
Thursday.
The Centers for Medicare & Medicaid Services (CMS) “has already
made the changes necessary so that the coronavirus test is now eligible
for coverage under Medicare and Medicaid,” Pence said at a press
briefing at the Pierce County Readiness Center here. “We’re working with
members of Congress to ensure coronavirus testing is included as an
‘essential health benefit’ and will therefore be covered by all private
insurance in this country as well … We’re making great progress in
ensuring this test is available broadly.”
The vice president also updated the official numbers on the outbreak,
noting that the U.S. now has “at least” 150 COVID-19 cases, “including
70 confirmed cases in Washington state.” Among the 150 cases are 49
patients who were repatriated from China or from the Diamond Princess cruise ship. He advised people to go to the CDC’s coronavirus website to get more information on the epidemic.
“We have observed that seniors and Americans with underlying health
conditions are particularly vulnerable to serious disease, especially
following the heartbreaking loss of life at the nursing home in
Kirkland,” said Pence. Ten residents at the Life Care residential
facility in the Seattle suburb have died so far. “We have taken action
to address that. This week at President Trump’s direction, we raised the
standards for all nursing homes in America with regard to guidelines for preventing the spread of infectious disease.”
In addition, “all 8,000 inspectors at CMS nationwide will be focusing all of their inspection efforts at nursing homes
on compliance with standards to prevent the spread of infectious
disease,” he continued. “We want to make every effort to ensure seniors
at nursing homes are as safe as possible from the spread of the
coronavirus.”
Test kits are also a focus of the administration. Earlier in the day,
Pence visited the 3M company in Minnesota, a manufacturer of the N95
respirators. During that visit, he admitted, “We don’t have enough test
kits today to meet what we anticipate will be the demand going forward,”
but at the Washington state press conference, he was upbeat.
“I’m happy to report the CDC has prioritized the delivery of test
kits to Washington state and to California,” he said. “The CDC’s test
supplier, a company known as IDT, will distribute kits across country
that will enable 1.2 million Americans to be tested for coronavirus;
those kits will be delivered in a matter of a few days. And by the end
of next week, another 4 million tests will be available. We want to make
sure testing is available broadly.”
In addition, “President Trump brought together leaders of the top
commercial labs in the country, and as we speak, at the president’s
urging they have formed a consortium,” said Pence. “They tell us in a
matter of weeks, they could well be in position where in the not too
distant future, your doctor and your local pharmacy will have access to
COVID-19 tests.” He also commended Congress for passing an $8.3 billion
supplemental funding bill to fight COVID-19; the president is expected
to sign the bill on Friday.
Pence suggested that the mortality rate from COVID-19 may likely be
lower than the current 3.4% estimated globally by the WHO. “I support
the president’s judgment that we’re going to continue to learn more
about this,” Pence said during a question-and-answer session. “As we
learn how many people actually contract this disease, we may well arrive
at a lower number.” He was referring to a theory offered Wednesday by President Trump,
who said that the 3.4% mortality rate “is really a false number” and
that “personally, I think the number is way below 1%” because many
infected people have only mild symptoms and haven’t been tested.
Ambassador-at-Large Deborah Birx, MD, who recently was added to the
White House’s Coronavirus Task Force, echoed those sentiments. “As we
get numbers country by country, we’ve been able to see in countries like
South Korea, they’re doing broad testing so they’re finding the mild
disease, moderate disease, and severe disease,” she said. “Their
mortality rate is in the 0.5% range, which is significantly less.”
Pence was in Washington state to see the progress being made against
the outbreak there; he met with Washington Gov. Jay Inslee (D) and
toured the state’s Emergency Operations Center; prior to his arrival in
the state, he led a conference call of the coronavirus task force.
During the press briefing, Inslee said he spoke with Anthony Fauci,
MD, director of the National Institute of Allergy and Infectious
Diseases, who “has provided very useful information.” As for the
conflicting opinions on the mortality rate, “I don’t think we have the
luxury of having debates of that nature right now,” he said. “We all
agree we need to get more tests in the field, increase manufacturing for
personal protective devices, and develop a vaccine as fast as humanly
possible, I’m pleased we have good consensus about those things.” https://www.medpagetoday.com/infectiousdisease/covid19/85269
