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Well, that was a quick fall from record heights:
U.S. stock futures this morning were pointing to a drop in magnitude for the Dow to open in a correction. A correction is defined as a move of down 10% from record highs. The Dow closed at a record earlier this month. As of Wednesday’s close, the Dow has dropped more than 8%, or nearly 2,400 points, in five straight sessions as coronavirus concerns intensified. (CNBC)
What to watch today: Dow to drop into correction as global coronavirus concerns widen
Goldman Sachs revised its earnings estimate for the year for U.S. companies to $165 per share, representing 0% growth in 2020.
Earnings growth for U.S. companies will be stagnant in 2020 as a result of the coronavirus, according to Goldman Sachs.
U.S. equities have been in a tailspin this week on fears that the deadly virus will dent global economic growth. The rapid spreading of the virus across multiple continents forced the Dow Jones Industrial Average to drop more than 7% since Monday. The S&P 500 lost about 6.6% and the Nasdaq fell nearly 2% in the same period.
“Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity, and elevated business uncertainty,” said Kostin.
Goldman sees zero earnings growth for US companies this year because of coronavirus
That would be the worst year since the financial crisis and Great Recession ended in 2009.
The coronavirus along with U.S. political uncertainty and the trade war will weigh on growth, the bank says.Global economic growth is likely to be the worst this year since the Great Recession as headwinds from the coronavirus and other factors build, according to Bank of America.
Gross domestic product growth worldwide is projected to slow to 2.8% for 2020, which BofA Global Research said would be the first sub-3% reading since the recession and financial crisis ended in mid-2009.
The biggest weight is the coronavirus outbreak, which has slammed economic activity in China as the disease spreads. BofA economists say the U.S-China trade war, political uncertainty and weakness in Japan and some regions of South America also are part of the “large spillover effects” weighing on output.
The global economy is heading for its worst year since the financial crisis, Bank of America says
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It’s more relevant to think about how the typical individual investor, a family in other words, has losses in 5-6 digits since last week. Younger folks will have plenty of time to recover before retirement, even middle-aged, but for seniors this can have a definite impact on retirement income.
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I think that’s why it is generally recommended that seniors have an asset allocation that is much lower in stocks than that of younger folks.
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As scavengers, our supply line isn’t really effected by this, but if (as is likely) this shakes consumer confidence, we may see a serious contraction in our sales. Well, if I’m not shipping, it will give me more time to list I suppose….
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Yeah, it’s going to be interesting to see how this shakes out. Looking at my sales today, people are still buying incredibly stupid and pointless things, so I guess they’re not concerned at the moment. How will this be a few months from now when people are forced to stay home from work and potentially lose their jobs because the businesses they work for have closed? Will they still buy wants over needs?
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Netflix, Facebook, Amazon, Peloton, Slack and Zoom are among a handful of companies that MKM Partners identified could rise despite the broader market sell-off.
Ebay’s on the list!
I guess deliveries will continue even during potential quarantines? I don’t see how, but yay? =/
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It took until this morning but I see the writing on the wall and jumped out pulling all my stocks, only lost about 8% but enough is enough.
I’ll probably get back in when it levels off. -
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I don’t know if it’s all all related, but I sold two older and higher priced items that are boring supplies. One was a Lexmark printer cartridge and another was is a piece of hardware. I wonder if the coronavirus effect on manufacturing will mean that people will go looking on ebay for items as they go out of stock through traditional means.
The last couple days of sales have also included: moose pins, deodorant, a dress. Not especially frivolous purchases, but maybe people are also looking for ways to shop without leaving the house.
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I don’t think this is going to be like the flu. Looks like an order of magnitude higher death rate, & very transmissible. My wife works in emergency ward. There is minimal surge capacity of people or beds. Nobody has made any plans or protocols. She thinks hospitals will be a huge source of new infections too, but nobody is educating the public to stay home & self-quarantine unless they have breathing problems.
It’s true young healthy people will be OK but I’m worried for people like my dad, older whose health is not great.
You can see a flip in the media/public health messaging too. We went from “it won’t spread here at all, big nothingburger” to “you’re inevitably going to get it, but it won’t be too bad” in like 1 day.
I remember reading about ancient Egypt, how you could tell when the pharaohs were losing a war because their “victories” kept getting closer to their own capital each time…
But I think the China situation, plus people turtling up at home, probably helps e-commerce.
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Anyway, we took the opportunity to fill our chest freezer, which we had wanted to do anyway, and stock up on basic meds, carbs, toiletries etc.
I am telling my coworkers to work from home if they are feeling at all unwell. We’re done here at end of March anyway, so no sense being heroes.
Luckily all my savings are in gold which is looking really good right now. I think I might buy index funds in a month or two though if things keep getting worse.
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The reporting is too all over the place on this. I’ve been following this since January – one day the virus is “mostly mild”, then the next day it’s “incurable, life-long effects.” I’m sure the truth is somewhere in the middle, but one thing is known: All information coming from China through official methods of communication is 100% falsified to save face. People were skirting China’s locked-down internet to leak real information as far back as January when China was still saying it was no big deal despite the “real” numbers being 2x/3x what the government was reporting.
Regardless, once it’s more well-known here in the US, we’ll see what it looks like vs. modern medicine. China is not known to have the best health practices and there’s still some aversion to modern medicine there. In the US, the real choke point will be hospital overcrowding.
And just for reference, the “normal” flu in Winter 2018-2019: 647,000 people were hospitalized, 61,200 died, and 42mil were “sick”. I found those numbers shocking.
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What gets me about the “it’s just the flu” is that when you look at just the Diamond Princess quarantine – if 700 people on a cruise ship caught the flu, would at least 6 of them die within a few weeks from it? Doesn’t that seem a bit odd and high of a death rate if it was just like the flu? Maybe 1 or 2 people would have died catching a normal flu on it, if even that many? Yes, the majority of them are in older or in their 80s, but they were active enough to go on a cruise ship in the first place.
Would China have quarantined 10% of their population (NY Times % quote) if it was just the flu?
It doesn’t help that there’s a great deal of misinformation floating around on this, even from normal news sites. I guess it’s best we all just use our best judgment on this.
Now Mike Pence is in charge of the response here and will muzzle the CDC on what they can say in public, so whatever statistics we will hear in our own country will be muted and downplayed. The effort to hide a basic level of transparency in order to “calm the markets” scares me. I want real statistics, dammit. Most states and major cities are still lacking test kits, too. All of the data received from the CDC will be days behind any possible community spread, hindering efforts of stopping whatever this is from spreading more.
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almasty, Well, one thing to keep in mind when comparing it to the regular flu….while it isn’t 100& effective, we do have a regular flu vaccine, which is probably one reason the deaths from “regular flu” are less than they might be otherwise….because the vaccine reduces the number of people contracting the regular flu in the first place.
At this point, we have no vaccine for this, and no way to stop the spread except quarantine and other safety measures.
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How about this. The Corona Virus is more than the flue (because there is no vaccine yet), but its not Ebola. Its clear that 80% of people who get it are not dying. South Korea are transparent and its clear that its mostly older people with pre-existing conditions dying.
China did such a large quarantine because they were the first to get hot and no one knew what the Corona Virus would do. They’re already letting people go back to work. The key is to have protocols when someone is suspected of being ill.
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We have city friends on text threads discussing how they’re stockpiling for self-quarantine. I find it amazing people dont have more than two to three days of supplies.
We’ve always had three months of food, etc in our house because we’re scavengers and buy big when there are good deals. We dont need the threat of zombies to stock up 🙂
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Wow, another big down day in the market today.
Yesterday with everything down, one of the bright stars was ETSY, with a great earnings report and stock price increase.
https://www.fool.com/investing/2020/02/27/why-etsy-stock-soared-today.aspx
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As a retired person with >75% of my wealth in the US stock market, I worry more about the prices my local thrift stores are putting on items than I do about a 10% correction in the S&P 500.
There was a minor correction in the Fall of 2015 to Feb 2016. If you put your money into cash at that point and sat out the next three years, waiting for the big correction, you would have missed the opportunity of a 50% gain in the market. My brother did that. The market would need to shed 30% of current value to get back to 2015.
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Ah! One silver lining. Ebay randomly de-listed an item of mine last year. I think because it was a quantity listing, the last one sold, then the buyer cancelled (a common bug).
It just so happened however that the listing was for a box of 20 brand new respirator cartridges. I saw it in storage and did a spit take – “weird this hasn’t sold yet?!”
Now I’m waiting for the right moment to relist this baby, #vulturestyle
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A couple years ago I found three trash bags of N-95 respirator masks for $30. We sold them at a decent quick flip. Those would be much more valuable now.
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Even the normal medical masks are doing well right now on Ebay, even though they are ineffective against Covid-19. Not sure if it has to do with supply chain issues or people panic buying everything.
All type of masks have been sold out in my city since January (I went around on foot and called places to find any), but I did stumble upon a few boxes at a small neighborhood pharmacy and was able to make a fast return on them – I do wish I had held onto them, they’re now going for $90 for a box of 10! That’s probably the best bet to find them these days – all the normal chains have been long sold-out and will probably not get restocked. Also in my city, hand sanitizer is getting hard to find. That might do well on Amazon or Ebay at this point.
That’s not even factoring in N95 masks, which have also been long sold out and if you’re lucky you can get them at a Home Depot or paint store on a rare restock. My Home Depot online says there are none available in a 100 mile radius around me.
If I had a car and lived in the middle of nowhere with less panicky people, I would be doing some serious RA at this point.
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Or maybe not. This just popped up in the seller hub:
COVID-19 (Coronavirus) – Important reminder about our listing policies
Considering the global developments associated with Covid-19 (Coronavirus) and our dedication to delivering a safe and trusted marketplace, we would like to remind you of eBay’s Listing Policies:
Health claims and misuse of keywords: titles and item descriptions containing health claims and misusing terms such as “Coronavirus”, “Covid-19”, ‘Virus”, “epidemic” are prohibited.
Inflated prices over market value: listings that attempt to profit from tragedies and disasters (such as the Coronavirus outbreak) are prohibited.
eBay requests that all sellers who have live listings offering items such as face masks, hand sanitizer gel or wipes, etc., review their listings and make sure that they comply with eBay listing policies.Activity that doesn’t follow eBay listing policies could result in a range of actions, such as eBay ending or canceling your relevant listings, hiding or demoting all listings from search results, lowering your seller rating, enforcing buying or selling restrictions, or suspending your account.
To learn more about the policies and make sure your listings are compliant, we invite you to read our three most relevant policies on this topic: Prescription and over-the-counter drugs policy, Disaster and Tragedy policy, Search manipulation policy.
Our thoughts are with all those affected by Coronavirus.
As always, thank you for selling on eBay.
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Yeah, at the time I did it I bought a few boxes for myself and sold the other boxes to cover the costs of the masks I purchased for myself. It would be nice to have the extra money they’re going for now, but eh. I also made sure not to buy out the entire supply of the store. I’ve seen pictures on Ebay of people with masks that clearly bought out skids of masks at their local Home Depots or pharmacies, not caring that other people could also purchase them.
I’m also not going to dig into my personal stash to sell the rest in case I get this thing and have to go out in public.
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This doctor in the UK posts daily updates based on info he has on the Corona Virus. He seems skeptical but level headed: https://youtu.be/cmIRMHzBZdU
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In California (but not near the recent new community cases). Some people are stocking up on things – bulk groceries mainly. I’m a bit more concerned that my dad get his meds if things get disrupted later but he is only allowed to get so much from the insurance at a time. (My husband is a pharmacist and drug shortages are often a problem already.) The older men in my family are feeling poor already due to the stock market plunges and if people start stocking up on basics, it might possibly curb their appetite for random Ebay stuff.
I think it will run its course but right now it seems like all they have to do is more testing and they will likely find more US cases. I’m not feeling confident in the federal response to keep it as controlled as maybe it could have been.
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I think the big deal with this situation will be supply chains. If you need prescription or otc medicine, might want to get ahead of the crowds. Panic buying has started in places. Even if it turns out to be nothing, demand for medical supplies and some foods will be limited. Especially since everything is made in China.
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Or India. We (UK) seem to get a lot of meds from there. Just bought a 25 lb sack of Basmati rice for 13 dollars, and 36 cans of baked beans for 7 dollars from Tesco. Should keep me going for a couple of weeks, and I can use the excess gas for heating.
Doesn’t seem to be any panic here, and the Chinese (we’ve got a large number of students) aren’t wearing masks.
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