U.S. Stock Market Tries To Rebound After Historic Sell-Off

Market Tries To Rebound Amidst Growing Number Of Coronavirus Cases

Yesterday, S&P 500 finished the day with an almost 12% loss. This was one of the worst days in the market history. Today, the U.S. stock market will try to gain some ground as bargain hunters will step in to initate positions in beaten stocks.

It remains to be seen whether such a rebound attempt would be successful since the situation on the coronavirus front continues to worsen. Currently, there are 27,980 cases in Italy, 14,991 in Iran, 9,942 in Spain, 8,320 in Korea, 7,272 in Germany, 6,633 in France and 4,667 in the U.S.

So far, only China and Korea managed to contain the spread of the virus so that the quantity of new cases in these countries is low. Others see a rapid increase in the number of new patients everyday, prompting increasingly tough restrictive measures to combat the spread of coronavirus.

Officials Do Not Hope For A Quick Resolution Of The Current Situation

Typically, government officials sound rather optimistic as they try to prevent people and markets from panic. The current situation is different. German Economy Minister Peter Altmaier expects that the coronavirus crisis may last until the end of May, while U.S. President Donald Trump stated that the crisis could last till August.

The stock market participants agree with this view as any material rebound during the current downturn has been sold. The main problem right now is the uncertainty since neither government officials nor investors have the tools to assess the true cost of coronavirus-containment measures and the duration of the crisis.

The market never likes uncertainty. In fact, bad news are better than uncertainty, so investors and traders should expect continued volatility in the coming days and weeks.

Beaten Stocks In Spotlight

Energy majors, like Exxon Mobil, BP, and Total, will attract a lot of attention today after the yesterday’s sell-off. This year, big energy companies have lost more than 50% of their market capitalization. In order for the market panic to stop, these big names need to attract investor support at their new levels.

As the coronavirus-related measures are implemeted at an increasingly larger scale, leading banks like Bank of America or Citigroup will also find themselves under investors’ lens as their portfolio could quickly deteriorate if the crisis drags on for a long time.