BREAKING NEWS Multi-state double murder investigation lands 3 in Butte County Jail Full Story
SEVERE WX : Fire Weather Watch View Alerts

Good news on US jobs won't stop the stock market bleeding

The Dow suffered another brutal day, closing down more than 900 points as investors question government officials' ability to handle the coronavirus crisis.

Posted: Mar 6, 2020 6:10 AM
Updated: Mar 6, 2020 6:10 AM

A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here.

February's US jobs report isn't giving much support to markets as fears about the economic impact of the coronavirus continue to whip investors into a frenzy.

The US economy added 273,000 jobs in February, much higher than economists had expected. The unemployment rate fell to 3.5%, an all-time low.

The strong data isn't boosting markets, however. Goldman Sachs notes that the survey period in mid-February was "too early to show a meaningful impact of the coronavirus outbreak on hiring." Dow futures are still down 725 points, or 2.9%.

The S&P 500 fell another 3.4% on Thursday, erasing a large chunk of its gains after Joe Biden's victories on Super Tuesday. The yield on the 10-year US Treasury note, which moves opposite prices, touched another record low of 0.695% on Friday. The VIX, a measure of volatility in the stock market, has spiked to its highest level since 2011.

The US jobs market has been a bright spot for investors in recent months, especially those who believe that the fundamentals of America's economy remain solid. But concern is on the rise that employment could be hit by a prolonged slowdown or recession.

"The labor market has been the pillar of strength in the US economy," Morgan Stanley chief US economist Ellen Zentner told clients this week. "However, stock market sell-offs, weakening global demand, strained supply chains, and heightened economic uncertainty will weigh on business sentiment and their ability to weather the storm."

Meanwhile, the prospect of US stocks falling into a bear market is on the rise. The S&P 500 is back in correction territory, down 10.7% from a record high notched in mid-February.

"The viral correction could easily approach bear-market territory within the next few days given the pandemic of fear," Ed Yardeni, president of Yardeni Research, told clients on Friday.

JPMorgan's Jamie Dimon recovering from heart surgery

JPMorgan Chase CEO Jamie Dimon is recovering from emergency heart surgery, the bank said late Thursday.

In a letter to employees, shareholders and clients, Dimon's two deputies — Gordon Smith and Daniel Pinto — said the chief executive experienced an "acute aortic dissection," or a tear in the inner lining of the aorta, that required surgery on Thursday morning.

The board has directed Smith and Pinto to take the reins of the largest US bank while Dimon recovers.

Investor insight: Shares are down nearly 4% in premarket trading. That's in line with other US bank stocks, which have come under severe pressure as the coronavirus spreads around the globe. Investors think the Federal Reserve will need to keep cutting interest rates, which hurts the profit banks make from lending. They're also worried about a US recession that would lead to a spike in loan losses.

On Thursday, the KBW Bank Index fell into a bear market. It's now 23% below its recent peak in early January.

Dimon, who has led JPMorgan since 2005, is one of the most powerful people on Wall Street. "There is no more feared or revered person today in the world of finance," Jeffrey Sonnenfeld, management professor at Yale University, told CNN Business.

OPEC's big bet isn't helping oil prices

OPEC is hoping to slash the supply of crude oil to world markets by 1.5 million barrels per day in an attempt to prop up prices. But the bid, which still needs sign-on from Russia, hasn't reassured markets. Brent crude futures, the global benchmark, plunged deeper into bear market territory on Friday.

The details: On Thursday, the cartel unveiled a plan to reduce output among its 13 members by 1 million barrels per day, and said it would seek an additional 500,000 barrels per day in cuts from longstanding allies, including Russia.

But Russia, the cartel's main partner, still has to agree to the deal, according to Iran's oil minister. The oil producers are meeting Friday in Vienna.

OPEC initially said the new cuts would run through June, but after a series of late night meetings Thursday, the cartel said they should continue until the end of 2020. Existing cuts of 2.1 million barrels per day by OPEC and Russia would also be extended through the end of the year under the plan.

That hasn't calmed jittery investors, who are trying to make sense of a record drop in demand and are worried Russia could scupper the deal entirely. Brent prices have fallen 3.8% to $48.11 a barrel, more than 30% from their peak in early January.

Up next

The US jobs report for February, which includes wage data and the unemployment rate, arrives at 8:30 a.m. ET.

Coming next week: The European Central Bank is expected to follow the Federal Reserve and cut interest rates, a bid to provide markets with extra liquidity amid growing concerns about the economic fallout from the coronavirus outbreak.

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 893364

Reported Deaths: 17256
CountyConfirmedDeaths
Los Angeles2940656956
Riverside653861279
San Bernardino615501070
Orange578481434
San Diego53498866
Kern33630415
Fresno30328430
Sacramento24957480
Santa Clara23679385
Alameda23001456
San Joaquin21473488
Contra Costa18342240
Stanislaus17455395
Tulare17365282
Ventura14050160
Imperial12668336
San Francisco12000138
Monterey1122586
San Mateo10961157
Santa Barbara9688119
Merced9415154
Sonoma9099134
Kings818683
Solano724974
Marin7038128
Madera494574
San Luis Obispo409232
Placer405257
Yolo311958
Butte304151
Santa Cruz274425
Napa191815
Shasta183930
Sutter183012
San Benito141915
El Dorado13064
Yuba128810
Mendocino111821
Tehama8248
Lassen7641
Lake67815
Glenn6493
Nevada6018
Humboldt5619
Colusa5496
Calaveras33917
Amador31316
Tuolumne2584
Inyo22015
Siskiyou1870
Mono1762
Del Norte1751
Mariposa782
Plumas630
Modoc280
Trinity250
Sierra60
Alpine30
Unassigned00
Chico
Clear
79° wxIcon
Hi: 81° Lo: 48°
Feels Like: 79°
Oroville
Clear
78° wxIcon
Hi: 79° Lo: 49°
Feels Like: 78°
Paradise
Clear
79° wxIcon
Hi: 74° Lo: 51°
Feels Like: 79°
Chester
Clear
57° wxIcon
Hi: 66° Lo: 38°
Feels Like: 57°
Red Bluff
Clear
80° wxIcon
Hi: 82° Lo: 49°
Feels Like: 80°
Willows
Clear
79° wxIcon
Hi: 82° Lo: 45°
Feels Like: 79°
Winds will not be as strong today, but the Red Flag Warning for high fire danger will continue through 5pm. Pleasant conditions are ahead for your Saturday, but then a more substantial wind event will bring extreme fire danger back into our forecast from Sunday through Monday.
KHSL Severe
KHSL Radar
KHSL Temperatures

Community Events