This Is Your Host “Panic”
By Tue, Mar 17, 2020
Hey Scoopers,
In its customary ways of responding to an interest rate cut, the market declined after the Fed cut the rate to near zero – more on that in the “Overall Market” section.
Beyond the overall market, not all stock prices were down. For example, shares of bread maker stocks were up on Monday. At the same time, one plane manufacturer is winning the top spot for the most hated stock on Wall Street — more on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, make sure to read our live coverage from NYSE on Monday morning — more on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
Market Recap
- U.S. markets: A nearly unanimous 12% decline across all three indices marked Monday as one of the worst days in the recent stock market history. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin is having its own problems, and Bitcoin’s price continues to hover around the $5,000 mark.
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Why Didn’t The Interest Rate Cut Work?
On Sunday, the Fed cut the U.S. interest rate to near-zero with the hope of preventing an economic recession. The market took the interest rate cut as a sign of disaster and sent the stock market indices down by nearly 12% across the board. It’s very customary for investors to take an interest rate cut as a sign of economic disaster.
Monday’s drop was scary. Fear took over the market and ran with it during the day. However, as we write this Daily Scoop, after-hours trading is going strong. It’s good to remember a few characteristics of the stock market during crashes. Morgan Housel, an award-winning analyst, investor, and Twitter personality, explains it best.
The two most important parts of market crashes are:
- In hindsight, they always go too far.
- They always rebound well before the real economy.
Bread Makers Win.
So, what happened?
Shares of ConAgra (Ticker: CAG) were up more than 8% on Monday, in spite of a massive sell-off across the stock market. Bargain-shopper investors are looking to benefit from the pantry panic-buying that is going on across the country, and break makers such as ConAgra are among the best options to consider. The upward movement of the stock could have also been triggered by the recent upgrade by analysts from CFRA.
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Who Is The Most Hated Stock On Wall Street?
So, what happened?
Shares of Boeing (Ticker: BA) were down more than 22% on Monday. With the recent drop, the stock is down nearly 60% in that last year. After a few rapid price declines in the recent months, and maxing out its line of credit of $13 billion, the company is now asking the U.S. government for support for itself, its suppliers and airlines. The impact of coronavirus on the travel industry is leaving the company off-guard. Boeing is surely dealing with quite a lot of uncertainties. However, at 1.26 times sales, the stock price is near a record-low level that has been rarely seen in recent years.
Live From New York Stock Exchange …
We were able to access live coverage from the U.S. stock exchanges on Monday morning and we are bringing it to you live from New York.
So what happened?
Queue dramatic music with suspense …. The host goes:
Live coverage of the stock market today. This is your host, “Panic.”
Earlier in the day, we noticed a phrase being repeated on the trading floor: “The interest rate is cut.”
By the time I heard it on the other side of the floor, all that came through was: “cut, cut, ….”
So, people around me interpreted it as: “Cut your holdings by half … run for your life. Everything is cut…”
Disclaimer: This is just a joke we made to laugh a bit. Don’t take it seriously.
About the Author
The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card
