(mellow inquisitive music)
- So today was the day
that it became very clear
the Fed will do whatever it can
to keep the economy and
the markets functioning.
The Fed rolled out two
new lending facilities,
for the first time, lending
directly to big US companies,
and it also brought back some facilities
we haven't seen since 2008.
So when the Fed wants,
in a pinch like this,
to get money out into the economy,
it starts by buying the
safest assets out there,
it buys it's own debt
back, US treasury bonds.
So they started last week
buying treasury and other government debt,
and then on Friday
they said they would start
buying municipal bonds.
And what you're starting to see now
is that that's not enough,
so the Fed is going really a step down
to slightly more risky assets,
which is corporate debt.
So they're gonna buy corporate bonds,
gonna issue corporate loans,
and that's a really unprecedented step.
The markets did not respond well at all.
The Dow and the S & P, big stock indexes,
end of the day, down about three percent.
They're now off 30 percent or so
from their highs just a month or two ago.
- The market had its best
day since 1933 today,
and that was due to lawmakers
getting close to signing
a massive stimulus bill
to help the economy.
The Dow finished up 11 percent today,
and the S & P 500 added 9.4 percent,
which marked its best day since 2008.
Markets have actually been very volatile
the last couple of weeks,
and it's not been unusual to see
these really big down days
followed immediately after
by really big up days.
For instance, even though we had
the biggest gain for the
Dow since 1933 today,
we've also within the last couple of weeks
seen some of the stock
market's worst falls in history
on March 9th, March 12th, and March 16th.
- Wednesday was another
really volatile day
in the stock market.
The S & P 500 rose as much as
five percent in the afternoon
before ending the day up 1.2 percent,
so was another crazy day for investors
and all of us financial
journalists watching at home.
Stocks closed positive
for two days in a row.
That's the first time that's
happened since February 12th.
Wednesday's moves came
with traders and investors
really checking on Congress
every five minutes or so
to see where the economic
stimulus package stands.
So markets rose a lot on
anticipation that it would pass,
and then they paired some
of the gains on signs
that maybe it won't be as smooth.
One of the most fascinating
things about Wednesday's moves
(laughs) was the massive swings
in airline stocks and Boeing.
Boeing, which is a big
component of the Dow,
rose 24 percent.
And that's the positive
side for some people
who track short-term gains,
but bigger picture, some
investors are still really worried
about the intra-day swings
and how big they are.
We're also waiting to see,
again, hard economic data.
What's been really crazy
is how fast this has all
happened in only a few weeks.
We actually haven't
seen much hard data yet
showing the really big slowdown
we're all preparing for.
As those data points start coming in,
whether they're worse than expected
or somewhat better than feared,
things like that could really shape
how markets swing over the coming days
and into next week, too.
- Today we saw that jobless
planes hit a record high.
The number of people applying
for unemployment benefits
hit a record 3.3 million.
So that's a sign of how this coronavirus
is taking a toll on
humans and the economy.
It's really hard to overstate
how bad this number was.
You know, this was above
numbers that we saw
during the global financial crisis,
and it's nearly five
times the previous high
that we've ever seen.
So there's this huge disconnect out there.
You've got these really,
really dark figures
on jobless claims, the
worst that we've ever seen.
And on the other hand,
you have stocks soaring,
they just ripped higher.
The Dow Jones industrial
average was up six percent,
and it just logged its
best three day streak
since the 1930s.
Some people think that
we can actually have
a pretty speedy recovery
in the third and fourth
quarters of this year,
and other people think
that, hey, we don't know,
we could be in for a prolonged downturn.
- So stocks ended Friday down,
but three days of gains.
Despite, you know,
some pretty encouraging
signs out of Washington
where the big coronavirus
aid bill did get passed
and signed by the president.
So stocks had a tough day.
That said, there were some
more encouraging signs
out of the credit markets,
in particular, demand for
this emergency funding
that the Federal Reserve
has been providing
overnight, dramatically fell.
It's this very crucial part
of the funding markets,
and it literally keeps lights on overnight
at banks and companies, you
know, all around America.
Two weeks ago when the Fed
rolled out its repo facility,
it had more than 250
billion dollars of demand,
people in the market saying "I need cash."
Today had only just a
little bit above 10 billion.
And so that tells you
that the private market
is starting to do its job again,
and maybe the Fed isn't
needed quite so much there.
One thing that's important to remember
is this is, at the end of
the day, a health crisis,
and the bill that comes
through Congress certainly has,
has about 150 billion
dollars for hospitals,
it has aid for municipalities.
But it can't fight the virus on its own,
and so markets are still
gonna be pretty concerned
until there's better data
on the coronavirus front.
