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It was another ugly day for Wall Street.
US stocks erased the prior session's gains and closed lower.
Trading was briefly halted in the early afternoon after the S&P fell 7%, triggering the New York Stock Exchange's circuit breaker.
"At this point, a coronavirus recession is inevitable. But the policy response can determine how deep it is, how long it lasts, and how rapidly the economy bounces back from it," wrote EPI Director of Research Josh Bivens.
A policy response with enough fiscal stimulus could help curtail the number of jobs lost, Bivens said. Moderate stimulus isn't enough, he warned, and could still allow for three million lost jobs.
Employment losses in the coronavirus recession, "much more laser-targeted at low-wage, low-productivity, and low-hours jobs in service industries," he added.
"Given that workers in these sectors are likely to have very little savings to tide them over the economy’s downturn, the ripple effect from the first round of job losses are likely to be far greater," Bivens said.
Markets are going wild again on Wednesday and assets are selling off across the board.
Diversification works in times of trouble, Tengler tells her clients.
But now would also be a good time to increase 401(k) contributions and add to equity portfolios.
High quality companies that will continue to be in business, be solvent and pay dividends look cheap right now.
"These are incremental buys," and it wouldn't be wise to jump in with both feet, she added.
That way investors will be prepared for the recession "we're inevitably entering into," Tengler said.
That escalated quickly.
The Federal Reserve slashed rates to zero on Sunday before Asian markets opened, but this hasn't helped calm financial markets.
Did the world's most powerful central bank make a mistake?
Even though the timing may have been slightly surprising, investors had already priced in a Fed rate cut to zero. That might be why the market didn't react more positively to the central bank's action.
The drastic cut also highlighted that the economy might be in a much rougher state than previously thought.
"The service industry has come to a shrieking halt across America," said Dimartino Booth. That is worrying because consumer spending is the backbone of the US economy.
"With the effects of the outbreak being felt more each day, our primary concern and area of focus is and has been on the health and safety of our associates, our customers, and our communities,” said Jill Soltau, chief executive officer of JCPenney. “We know this is a critical, unprecedented time and our thoughts are with those who have been impacted.”
As the coronavirus crisis keeps markets in a chokehold, liquidity has gotten tight.
US Treasury bonds are normally the most liquid asset in the world, meaning they can be converted into cash so quickly that they are cash-like. Under normal circumstances, Treasuries are "the gold standard for liquidity," said John Bellows, portfolio manager at Western Asset Management.
"The demand for cash is causing investors to sell their Treasuries," Bellows said.
In line with that, the 10-year Treasury bond headed lower on Wednesday, with its yield moving back above 1.1%. Bond prices and yields move in opposite directions to each other.
The sold Treasuries then pile up on the balance sheets of broker dealers, which is what is draining the liquidity from the market, Bellows said.
"The risks are to the upside here. The Fed can and will do more as the need for cash increases," Bellows added.