Stock Markets Sink Deeper on Coronavirus Fallout

Trump Administration Starts Enforcing ‘Public Charge’ Immigration Rule

The Trump administration on Monday started enforcing new income-based requirements for green cards and certain types of visas, coming days after the Supreme Court ruled in favor of the measure. Under the new rules, most green card applicants in the United States and abroad will now have to be evaluated under a new set of guidelines to determine whether they’ll be a “public charge.” The rule is expected to affect millions and might force numerous immigrants to stop using public welfare programs, including Supplemental Security Income, assistance from the Temporary Assistance for Needy Families program, Medicare, and other programs. The Department of Homeland Security (DHS) said it will also look into an immigrant’s age, health, family status, assets, resources, financial status, education, skills, and other factors. “President Trump continues to deliver on his promise to…

Initial signs of a bounceback in global stocks proved temporary as indices across the world continued their downward slide on fears about the fast-spreading coronavirus.

Wall Street indices gave up some initial gains mid-morning Tuesday, with the S&P 500 and the Dow Jones both down 1.16 percent as of 11:10 EST, while the Nasdaq dropped 1.24 percent.

Chart showing the S&P 500 stock index on Feb. 25, 2020. (Courtesy of TradingView)

U.S. equities have suffered their biggest losses since mid-2016 amid fears the coronavirus may be morphing into a pandemic that could cripple global supply chains and have a bigger-than-expected economic impact.

“In the short run, the financial markets tend to be driven by greed and fear. And on Monday, fear dominated. The overriding fear is, of course, the coronavirus,” said Robert Johnson, Professor of Finance at Heider College of Business, Creighton University. Johnson added that the rising nomination prospects of Sen. Bernie Sanders (I-Vt.) may have exacerbated Monday’s market headwinds.

“But another factor is the fear that investors see with a potential Bernie Sanders presidency and the implications of Medicare for All. Look at United Healthcare (UNH) that fell nearly 8 percent. Many investors are panicking and assuming the worst about both a potential global pandemic and U.S. political risk,” Johnson told The Epoch Times via email.

On Monday, the S&P 500 fell 111.86 points, or 3.4 percent, while the Dow Jones plummeted 1,031.60 points, or 3.6 percent.

The drops represent the biggest single-day percentage falls for both indexes since Feb. 8, 2018.

“While Monday’s drop is the third-largest point drop in Dow in market history, it doesn’t even register as a top 20 percentage drop,” Johnson added, putting Monday’s market moves in a historical perspective. “One problem with people focusing on the Dow is that they focus on point drops. A 1,000 point fall from 29,000 represents a 3.5 percent drop, while in 1987, a 500-point drop represented a 22 percent decline.”

‘Very Strong’ Economic Fallout

European shares recorded their worst one-day loss since June 2016 on Monday, as reports of new virus hotspots outside Asia mounted.

The pan-European STOXX 600 index initially rose 0.6 percent on Tuesday, before falling around 0.3 percent as markets digested the economic impact prospects of the virus. Futures contracts of the STOXX 600, which are forward-looking and can help gauge investor expectations for upcoming market moves, similarly spiked on market open before rebounding and stabilizing around the level of Monday’s close.

MSCI’s All Country World index, which tracks shares across 47 countries, was down 0.33 percent by 07:37 EST. The index suffered its biggest daily drop in two years on Monday.

Italy, Europe’s biggest COVID-19 hotspot, has put dozens of towns on lockdown in an effort to stem the spread of the disease, with officials reporting the country’s seventh virus-related death.

Italian Prime Minister Giuseppe Conte has warned that the economic fallout from the outbreak would be “very strong,” but said he was confident the contagion would come under control soon.

The FTSE MIB, a key Italian stock index, was down 0.81 percent at 08:20 EST on Tuesday.

‘Quite Large’ Number of New Cases in South Korea

On Tuesday, South Korea’s hard-hit market managed to close 1.18 percent up, with the Korea Composite Stock Price Index gaining 24.57 points.

The country has the third-highest national total of coronavirus infections, behind China and Japan, with the majority linked to the city of Daegu.

“In Daegu, the number of new cases that are being confirmed by tests is quite large, and if we fail to effectively stem community transmissions in this area, there would be a large possibility [that the illness] spreads nationwide,” South Korean Vice Health Minister Kim Gang-lip said in a briefing, France24 reported.

Japan’s Nikkei was down 3.4 percent Tuesday, catching up with the global sell-off after having been shut on Monday, while Shanghai blue chips eased 1.6 percent.

Reuters contributed to this report.

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US Military Dependent in South Korea Confirmed to Have Coronavirus

At the same time, the military raised the risk level to “high” in South Korea amid the outbreak as “a prudent measure to protect the force,” according to the release. U.S. Forces Korea also warned its personnel to exercise caution while traveling off-base and if service members feel sick, don’t go to work or school and seek medical help. It also ordered service members to limit in-person meetings, gatherings, and temporary duty travel and assignments. Personnel were also warned. People wearing masks to prevent the novel coronavirus walk along the Myungdong shopping district in Seoul, South Korea, on Feb. 23, 2020. (Chung Sung-Jun/Getty Images)Personnel should “expect longer wait times, possible temperature checks and screening questionnaires at gates to access installations,” the service added. Basic hygiene measures such as washing hands…