Another bad stock day predicted based on US equity futures

U.S. equity futures are pointing to another large drop in shares on Friday, the day after the biggest drop in nine years.

The major futures indexes are indicating a decline of 1.1 percent, but overnight, Dow futures were down by more than 400 points.

It has been six days of this.

THE PLUNGE

The Dow plunged 1,190.95 points yesterday, bringing its loss for the week to 3,225.77 points, or 11.1 percent. Fox News puts it in perspective, the Dow’s 508-point loss on Oct. 19, 1987, was equal to 22.6 Percent.

The S&P 500 fell 4.4 percent to 2,978.76 and is 12 percent below its high.

The U.S. losses extended a slide that has wiped out gains major indexes posted this year.

European markets are looking at large percent declines. London’s FTSE slipped 3.3 percent, Germany’s DAX fell 3.7 percent and France’s CAC dropped 3.1 percent.

In Asia, Tokyo’s Nikkei tumbled 3.7 percent, Hong Kong’s Hang Seng lost 2.4 percent and China’s Shanghai Composite lost 3.7 percent.

Investors are reacting to the outbreaks in Italy, South Korea, and Iran. The global threat if it comes to pass would derail trade and industry.

PROFIT WARNINGS

More and more companies are issuing profit warnings and say factory shutdowns in China are disrupting supply chains. They say travel bans and other anti-disease measures also are hurting Chinese consumer spending.

China shut down much of its economy to stem the spread of the infection.

Elsewhere, governments are tightening anti-disease controls as new cases mount.

Japan will close schools nationwide. Saudi Arabia banned foreign pilgrims from entering the kingdom to visit Islam’s holiest sites. Italy has become the center of the outbreak in Europe, with the spread threatening the financial and industrial centers of that nation.

Goldman Sachs on Thursday said earnings for companies in the S&P 500 index might not grow at all this year, after predicting earlier that they would grow 5.5 percent.

OPINION

The flu season, which is in the Fall and Winter, is almost over. It usually ends after February, although there are outbreaks even until May. If Covid-19 reacts like the flu, we will start to see a leveling off in March. Hopefully, that will be the case. It usually is with viruses. If we don’t, this will impact the President’s re-election. It might anyway. The growth we expected might not return this year.

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