Wall Street just had an exceptionally bad case of the Mondays.
Yeah, what was that?
Markets dropped low. So low that one index, the S&P 500, triggered a "circuit breaker" – a 15-min trading pause to let investors figure out wtf is happening and what to do next. The Dow Jones Industrial Average still dropped over 2,000 points – its worst day since the 2008 recession.
Yikes. If I were to guess...
This has to do with the coronavirus? Yup. As the number of cases have surged, the economy has slowed down. Leaving investors concerned about how COVID-19 affects consumer demand, manufacturing, and major global economies. They only had to look at the oil industry.
What's happening there?
Earlier this week, oil prices had their largest single-day drop since 1991 during the Gulf War (which was, in part, over...oil). In this case, Saudi Arabia and Russia were in a standoff about what to do with their oil supply since the coronavirus was leading to a drop in demand. Saudi Arabia said 'let's slow down what we're putting out.' Russia said 'nah.' So over the weekend, Saudi Arabia slashed its own oil prices – ultimately launching a price war between two of the world's biggest oil producers.
How's President Trump reacting to all this?
By trying to work out a stimulus package with Congress. It could include a temporary payroll tax cut to reduce the tax burden on individuals and businesses. Legislation to protect hourly workers who need paid sick leave. Loans for small businesses. And relief for airline, hotel, and cruise industries as travelers cancel plans. He'll talk more about it today.
Yep. Yesterday, Italy expanded its lockdown to the entire country. Everyone coming to Israel gets a quarantine. Universities across the US are increasingly going remote. And a number of events around the world are being canceled.
The coronavirus was already hitting the economy hard. Oil market drama isn't helping. Because one ingredient that helps the economy run like a well-oiled machine is, surprise, oil. It could mean you'll pay less at the pump. You might even get better borrowing terms on loans. And if you're investing for the long-term, you can probably afford to wait it out. But some say these signs could lead to a recession – something the Trump admin is keeping a close eye on.
Skimm More: We explain the latest on the coronavirus and how to be prepared here.
Where people are seeing double...
Afghanistan. Yesterday, the country got two presidents. We'll explain. Both incumbent President Ashraf Ghani and his rival Abdullah Abdullah held simultaneous swearing-in ceremonies and declared themselves prez. Reminder: last year, Ghani narrowly won the presidential election. And Abdullah claimed election fraud. The country's election commission ended up declaring Ghani the winner. But his rival said 'not so fast' and that he'd form his own gov. The whole competing presidents thing is making it harder for the US to tie things up in the country and end nearly two decades of war there.
Speaking of…: Yesterday, the US started withdrawing hundreds of American troops from Afghanistan as part of its historic peace deal with the Taliban. First up: over 4,000 troops will leave in the coming months. And the rest (over 8,000) would leave within 14 months if all goes according to negotiations.
Who's saying 'slow your horses'...
Federal prosecutors. Yesterday, they charged 27 people in an international doping scheme...for racehorses. Those charged included drug distributors, veterinarians, and racehorse trainers, including the trainer for Maximum Security. Aka the one who came in first at last year's Kentucky Derby but was disqualified for interference. Prosecutors called the doping scheme "nothing less than abuse," pointing out that those charged allegedly forced horses to run faster, giving the owners a competitive edge to win prize money. PETA called the crimes "egregiously cruel." Some of those accused are reportedly planning to plead not guilty.
What's dropping like it's hot…
Carbon emissions. Yesterday, a study showed that global carbon dioxide emissions fell 2% last year – something that dropped that was actually good. This is the biggest drop in nearly 30 years in part due to the power industry reducing its use of coal and moving to renewable energy and gas. But the study's lead author warned against swapping one fossil fuel for another and pushed for a boost to wind and solar.