- Dow Jones futures fell by as a lot as 162 factors Monday night time.
- Analysts are warning of a “double-dip” recession if lockdown restrictions result in a second wave of Covid-19 infections.
- Coronavirus has now contaminated greater than four.1 million individuals worldwide, in keeping with official estimates.
U.S. inventory futures moved decrease in in a single day buying and selling Monday, as traders anxiously monitored the gradual lifting of lockdown restrictions which were in place since March.
Many are welcoming the reopening of America, whereas others are involved that a ‘too-hasty’ method might have extreme ramifications for public well being and the financial system.
Inventory Futures Decline
Futures costs on all three main U.S. indexes traded decrease Monday night. The Dow Jones futures contract declined 162 factors earlier than paring losses. It was final down 110 factors or zero.5%. S&P 500 futures slumped zero.5%. Nasdaq 100 contracts had been off zero.2%.
The Dow slumped 109 points in New York, while the broader S&P 500 reversed gains in the final moments of trading as investors continued to monitor the spread of Covid-19.
The global caseload is fast-approaching 4.2 million, with nearly 286,000 deaths reported. America’s caseload is over 1.3 million, according to Johns Hopkins University.
Economy Risks Double-Dip Recession: Analysts
Markets have rallied in recent weeks on hopes that the U.S. economy would soon reopen–ending months of lockdown that has displaced tens of millions of workers.
But not everyone believes ending the lockdown is a good idea, as it runs the risk of reigniting another wave of the pandemic.
Rather than the ‘V-shaped’ or ‘U-shaped’ recovery that many economists are hoping for, reopening too quickly could lead to a “W-shaped disaster.” That’s the view Harvey Kennedy School professor Jeffrey Frankel.
In an interview with Yahoo Finance, Frankel said:
The push to reopen the economy is making a W-shaped recovery very much more likely.
A ‘W-shaped’ path entails a double-dip recession where the economy recovers momentarily before plunging again.
Frankel’s view is shared by Washington University economist and Federal Reserve research fellow Yongseok Shin.
Shin told Yahoo:
People will then hunker down for fear of infection, and local governments will re-impose lockdowns, quashing any economic recovery we will have had to that point.
Federal Reserve Chair Jerome Powell said last month, “We’ll see economic data in Q2 that’s ‘worse than any data we’ve seen’”:
A double-dip recession would be disastrous for an economy that is projected to contract by nearly 35% in the second quarter. But extending the lockdown could be equally daunting as millions of businesses run the risk of closing permanently.
A recent survey from the Society for Human Resource Management found 52% of companies expect to be out of business within six months.
Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.
This article was edited by Josiah Wilmoth.