Pandemic’s ‘unique uncertainty’ creates market shockwaves


JUDY WOODRUFF: It has been a day like few
others in modern American life, from the East Coast to the West and from the stock exchange
to schools, sports and houses of worship. For stocks, it was their worst day of trading
since the 1987 market crash. As fears of the pandemic spread, the Dow Jones
industrial average plunged 10 percent, down 2,352 points, to close at 21200. The Nasdaq plummeted 750 points, and the S&P
500 lost more than 260. Meanwhile, a rapid-fire succession of new
cancellations and closures rippled across the U.S. and around the world today, from
major sporting events and cultural institutions, to entire school systems, and even Catholic
churches across Rome. The U.S. now has more than 1,300 COVID-19
infections in at least 45 states and the District of Columbia, that as the fallout intensified
over President Trump’s decision to ban travel from most of Europe. Nick Schifrin begins our coverage. NICK SCHIFRIN: In the only containment area
in the country, food is handed out by the National Guard. New Rochelle, New York is one of the cities
on the front lines of disruptions, delays, and closings across the country because of
COVID-19. Public schools are closing for nearly four
million students, including every K-12 school in Ohio and Maryland. New York state banned gatherings of more than
500. Broadway and Manchester’s Metropolitan Museum
of Art and Metropolitan Opera are going dark. Disneyland will close for rest of the month. Major League Baseball suspended operations. The National Hockey League paused its season. And the NCAA canceled its March Madness tournament,
which was supposed to start next week. On Capitol Hill, the question was whether
the U.S. has enough tests. Utah Republican Senator Mitt Romney: SEN. MITT ROMNEY (R-UT): We don’t have that level
of testing that you’re seeing in other countries, like South Korea. And we wonder why they have several thousand
people a day getting tested, and we have a handful. NICK SCHIFRIN: Dr. Anthony Fauci, the National
Institute of Health’s infectious disease chief, agreed in response to Florida Democrat Debbie
Wasserman Schultz. REP. DEBBIE WASSERMAN SCHULTZ (D-FL): There’s not
one person that can ensure that these tests can be administered, yes or no? DR. ANTHONY FAUCI, Director, National Institute
of Allergy and Infectious Diseases: The system does not — is not really geared to what we
need right now, what you are asking for. That is a failing. REP. DEBBIE WASSERMAN SCHULTZ: A failing, yes. DR. ANTHONY FAUCI: It is a failing. Let’s admit it. REP. DEBBIE WASSERMAN SCHULTZ: OK. DR. ANTHONY FAUCI: The idea of anybody getting
it easily the way people in other countries are doing it, we’re not set up for that. Do I think we should be? Yes. But we’re not. NICK SCHIFRIN: Despite the experts’ testimony
and despite the CDC not releasing official statistics, 45 minutes later, President Trump
said this: DONALD TRUMP, President of the United States:
We have them very heavily tested. If an American is coming back or anybody’s
coming back, we’re testing. We have a tremendous testing setup where people
coming in have to be tested. NICK SCHIFRIN: People are rushing to come
in from Europe today, where presidential calls for calm were met with fear and confusion. WOMAN: Definitely been like a lot of uncertainty,
which has caused a lot of, like, panic. KARL, American Tourist in Madrid: I think
it’s a definitely a difficult situation for everyone to be in. And it’s clear that the situation is being
handled chaotically. NICK SCHIFRIN: American citizens can return
home from Europe, as can U.S. citizens’ foreign family members. But the confusion came after President Trump’s
Oval Office statement last night blaming Europe. DONALD TRUMP: A large number of new clusters
in the United States were seeded by travelers from Europe. After consulting with our top government health
professionals, I have decided to take several strong, but necessary actions to protect the
health and well-being of all Americans. NICK SCHIFRIN: President Trump’s suspension
of travel from the European continent to the U.S. starting Friday was met with shock, European
officials tell “PBS NewsHour.” And, today, the European Union’s top officials
delivered a short and terse response: “The European Union disapproves that the fact is
that the U.S. decision to impose a travel ban was taken unilaterally, and without consultation.” In an Oval Office meeting with the prime minister
of Ireland, which is exempt from the ban, President Trump called it necessary. DONALD TRUMP: We had to make a decision. And I didn’t want to take time of — it takes
a long time to make the individual calls. And we are calling. And we have spoken to some of them prior to,
some of the majors prior to. But we had to move quickly. I mean, when they raise taxes on us, they
don’t consult us. NICK SCHIFRIN: Apparently, the majors include
the United Kingdom, whose officials tell “PBS NewsHour” they were informed beforehand and
are also exempt from the band. DONALD TRUMP: One of the reasons, U.K. basically
has been — it’s got the border. It’s got very strong borders, and they’re
doing a very good job. They don’t have very much infection at this
point. And, hopefully, they will keep it that way. NICK SCHIFRIN: Johns Hopkins University says
the most infections in Europe are in Italy, France, Spain, and Germany. The United Kingdom has the 10th most infections. But, in London, Prime Minister Boris Johnson
warned things would get worse. BORIS JOHNSON, British Prime Minister: The
true number of cases is higher, perhaps, much higher than the number of cases we have so
far confirmed with tests. NICK SCHIFRIN: Worldwide the virus has reached
110 countries and infected more than 126,000 people. Denmark, Norway and Ireland have ordered all
schools closed. In Italy, the death toll today topped 1,000. Residents are coping with tighter restrictions,
after the government yesterday ordered most businesses shut. But where the virus originated, the streets
are returning to normal. Chinese health officials claim the lowest
total of new cases, about a dozen, since the outbreak began. But the Chinese are also pointing fingers
outward. The Foreign Ministry’s deputy spokesman tweeted
today: “It might be U.S. Army who brought the epidemic to Wuhan.” That is a lie, U.S. officials say, designed
to deflect blame. JUDY WOODRUFF: That was Nick Schifrin. And we return now to the financial fallout. And to help make sense of today’s dramatic
drop in the markets, Liz Ann Sonders is the chief investment strategist for Charles Schwab
and Company. Liz Ann, welcome back to the “NewsHour.” It looks pretty cataclysmic. What is driving this? LIZ ANN SONDERS, Charles Schwab: Yes. So, obviously, we know the virus and the unique
uncertainty with regard to — we know it’s going to get worse before it gets better,
but the economic impact, the impact on corporate earnings. Then we had the double whammy of the collapse
in OPEC talks and the crash in oil prices, and how that’s filtered into the economy,
but also significant dislocations in the corporate bond market, and then, more recently, you
had dislocations occur in the Treasury market, which is why the Fed stepped in with what
they did today. So, unfortunately, it’s been this triple whammy. It’s not just the virus. JUDY WOODRUFF: So, in layman’s terms, is there
nothing to reassure investors, to reassure the markets right now? LIZ ANN SONDERS: Well, I think we saw a bit
of shock and awe out of the Fed today, but that’s really just to stabilize the Treasury
market. The Fed has been very honest in saying that
they can’t really do much to ease the pain of a pandemic. They can’t create a vaccine. They can’t create tests. And I think there’s this realization that
central banks have limited power. So I think we probably need a bit more shock
and awe from government authorities, something on the fiscal policy side. And the markets are telling you that we haven’t
gotten that yet. JUDY WOODRUFF: And what would that look like,
the fiscal policy side? LIZ ANN SONDERS: Well, there have been lots
of ideas bandied around, whether it would be done through some sort of payroll tax holiday,
a little more discussion recently about just actually providing money. Is it more targeted toward those individuals
or industries that are most at risk? So there’s a lot being discussed. I’m not inside those conversations. JUDY WOODRUFF: Right. LIZ ANN SONDERS: But, so far, we’re not yet
seeing that shock and awe, like at least the central banks are attempting to give us, which
is limited in its aid. JUDY WOODRUFF: So, in the meantime, until
that happens, we stand back and watch and hope? LIZ ANN SONDERS: Well, we are at a level of
decline in the market that’s about in line historically with what the market has done
in anticipation of recessions. Now, this is a unique cause to a likely recession,
given that we have whole swathes of the economy literally simultaneously shutting down all
at once. So, there’s a tremendous amount that’s unique
about this set of circumstances. But if it is significant enough to bring on
a recession, the market, at this point, is discounting it at a similar level than what
has been the case in the past. That doesn’t mean the bottom is in, but we
have hit those levels as of today. JUDY WOODRUFF: Pretty grim. Liz Ann Sonders, thank you very much. LIZ ANN SONDERS: Thanks, Judy.

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