Surprise drop in Fed rates, equity volatility and financial stress

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"Our best estimate is that if the incoming information regarding the virus and its impact on the United States and the global economy remains unfavorable, the Fed will make two further rate cuts of 25 bp in upcoming meetings before 39 assess in June whether the outlook is beginning to stabilize or the dynamics of recession are starting to take hold, "wrote Krishna Guha and Ernie Tedeschi of Evercore ISI.– Melloy

"The action is if something a little earlier and bigger than what consensus and economist markets have been waiting for, which should be positive for risky assets," wrote Andrew Hollenhorst of Citi. . "In addition, it will be considered likely to be followed by accommodations from other central banks around the world."

"We would not be surprised by further easing in March or April," added Citi. – Melloy

President Trump urged the Federal Reserve to take further action, writing in a tweet "More flexibility and reduction!"

The shares of major real estate manufacturers jumped Tuesday morning after the surprise cut in Federal Reserve rates. Lennar's shares rose 4.8%, while PulteGroup, D. R. Horton and KB Home all traded more than 3%. Delivered

In volatile trading session that saw the Dow boost between three-digit gains and losses, main averages are once again higher as the street digests lower Reserve emergency rates Federal. The Dow Jones is up 111 points, or 0.4%, while the S&P and Nasdaq are each up 0.6%. Stevens

Stocks rebounded immediately after the Federal Reserve announced lower emergency rates, but large averages quickly returned those gains to negative again. The Dow Jones is now down 100 points. Stevens

Significant averages are all down more than 1%, with the Dow falling more than 350 points to the lowest. Stevens

Despite Monday's surge in stocks, transportation stocks are still feeling the pain. The 20 components of the Dow Transportation Average are in correction territory, more than 10% below recent peaks. Francolla, Stevens

After opening up, the Dow quickly reversed and is now down more than 200 points. Stevens

The stocks have changed little, with investors still hoping for a boost from the Federal Reserve, despite the disappointing statement from the G-7 that contained no specific measures. The Dow Jones Industrial Average fell 25 points, or 0.09%, while the S&P 500 and Nasdaq fell 0.3% and 0.13% respectively. Stevens

After briefly rallying to the worst levels of the day, the US stock futures have continued their decline and are now showing a triple-digit loss. The Dow Jones is expected to open more than 200 points after the closure of a New York high school due to a suspected coronavirus case in its community, according to Reuters. The S&P 500 and Nasdaq also indicate losses to l & # 39; opening. Investors are still hoping for action from the Federal Reserve, despite the G-7 statement which said there was no specific action. Prior to the declaration, the US futures contracts indicated gains at the opening. Stevens

The shares of airline stocks are in the green, with Delta gaining more than 3% and United and American up more than 1% each in trade before marketing. While the coronavirus has spread, the airlines have been particularly hard hit and the three stocks are currently trading in the bear market. Stevens

Chipmaker Qorvo lowered its revenue forecast for the March quarter to $ 770 million from a range of $ 800 million to $ 840 million previously. The chipmaker said the coronavirus has impacted "the smartphone supply chain and customer demand more than expected". Qorvo's shares, however, increased by 1.6% in pre-market trade, as the negative impact of the outbreak could have been incorporated. Qorvo has already fallen by almost 14% this year. "The full impact of COVID-19 remains difficult to predict given the uncertainty of the scale, duration and geographic scope of the epidemic," added the company. – Li

Kohl's shares rose more than 4% in Tuesday's pre-market trading after the retailer surpassed upper and lower estimates in the fourth quarter. The company earned $ 1.99 per share on $ 6.537 billion in revenue, while analysts polled by Refinitiv expected EPS of $ 1.88 and $ 6.523 billion in revenue. CEO Michelle Gass said the chain has seen "faster traffic" and new customers in stores and online. Comparable store sales were stable, but were better than the 0.1% drop expected by analysts. – Stevens

Here's what the statement told me:

"Given the potential impacts of COVID-19 on global growth, we reaffirm our commitment to use all the appropriate political tools to achieve strong and sustainable growth and to guard against downside risks. At the same time as strengthening efforts to expand G7 finance ministers are ready to take action, including tax measures if necessary, to help tackle the virus and support the economy during this phase. of the G7 will continue to fulfill their mandates, thereby supporting price stability and economic growth while preserving the resilience of the financial system.

We welcome the readiness of the International Monetary Fund, the World Bank and other international financial institutions to assist member countries in coping with the human tragedy and the economic challenge posed by COVID-19 through use of their available instruments wherever possible. "

Equity forward contracts are reversed and now point to short losses after the G-7 press release did not mention any specific action to combat coronaviruses.– Stevens

Global investors were awaiting a G-7 statement on how the world's major economies plan to counter the impact of the coronavirus on economic activity. However, Reuters quoted a G-7 official with direct knowledge of the deliberations, saying the statement does not include any specific calls for new public spending or coordinated cuts in interest rates by central banks. Imbert

It is expected on Wall Street that the world's central banks will soon provide a stimulus to offset the potential economic fallout from the coronavirus. On Tuesday, the Reserve Bank of Australia announced a rate cut of 25 basis points to 0.5%, a new record. The governor of the central bank acknowledged that the epidemic had a "significant effect" on the economy of the country. Meanwhile, the market has already set a rate of 50 basis points at the Federal Reserve policy meeting this month. Many also see the possibility that the Fed will pull the trigger before its March 18 meeting. Investors are awaiting a statement from the major G-7 economies on plans to mitigate the impact of the virus following a conference call Tuesday morning chaired by Treasury Secretary Steven Mnuchin and Fed President Jerome Powell. Li

JMP Securities upgraded Tesla stocks to outperform the market compared to market performance and set a high street price target of $ 1,060 per share, which boosted the shares of the electric automaker by more than 6% to $ 793 per share in the trade before marketing Tuesday. "The withdrawal provides investors with a good opportunity to get into the action in our opinion, and a thorough reading of competitors' offers suggests that TSLA's market position should continue to be dominant," said Joseph Osha, analyst at JMP Securities, in a note to clients. Telsa's shares have risen almost 80% this year. Fitzgerald

US equity futures indicated mixed gains at opening as market awaits G-7 call statement and number of coronavirus cases worldwide exceeds 90,000. Quiet trading in futures contracts deviates from recent market volatility. Stocks came back to life on Monday, with the Dow Jones gaining 5.09% for its best day in almost 11 years, and all major averages posted their strongest point increases ever. Monday's surge, however, followed the worst week since the financial crisis, so stocks still have a long way to go to offset recent declines. Stevens

With CNBC reports Fred Imbert, Gina Francolla, Jesse Pound, John Melloy and Michael Bloom.

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