Panic Takes Hold

Markets Now Markets BA DNLI IONS WYNN Boeing Ionis Pharmaceuticals Denali Therapeutics Wynn Resorts Christine Lagarde Donald Trump Andrew Brenner Josh Schimmer Larry Kudlow Washington WYNN BA DNLI G/FED HYG IONS LQD WYNN HYG iShares iBoxx $ Investment Grade Corporate Bond iShares iBoxx $ High Yield Corporate Bond LQD Barrons.com Barrons Blogs DJIA Dow Jones Industrial Average's S&P 500 SPX CODES_REVIEWED Markets Now Markets Volatility author Ben Levisohn author|Ben Levisohn author Ben Levisohn id Ben Levisohn name Ben Levisohn topicid 8022 rank 1 topicid barrons_display_brand BARMKTNOW barrons_display_brand|BARMKTNOW codetype BARRONS_DISPLAY_BRAND name Markets Now source MANUAL value BARMKTNOW code BARMKTNOW canbedisplaybrand true status modified barrons_display_subject BARMKTS barrons_display_subject|BARMKTS canbedisplaysubject true codetype BARRONS_DISPLAY_SUBJECT name Markets source MANUAL value BARMKTS code BARMKTS status modified co boeing co|boeing country US symbol BA displayname Boeing why occur extractedtext Boeing source FACTIVA seoname boeing countrycode US relevancerange low chartingsymbol STOCK/US/XNYS/BA fcode boeing fullextractedtext Boeing ticker BA confidence 100 subcat com relevance 12 significance prominent name Boeing confidencerange high exchange NYSE exchangeisocode XNYS codetype co code boeing status modified onlinesignificance prominent co issph co|issph country US symbol IONS displayname Ionis Pharmaceuticals why occur extractedtext Ionis Pharmaceuticals source FACTIVA seoname ionis_pharmaceuticals countrycode US relevancerange low chartingsymbol STOCK/US/XNAS/IONS fcode issph fullextractedtext Ionis Pharmaceuticals ticker IONS confidence 91 subcat com relevance 9 significance prominent name Ionis Pharmaceuticals confidencerange high exchange Nasdaq exchangeisocode XNAS codetype co code issph status modified onlinesignificance prominent co sswkxb co|sswkxb country US symbol DNLI displayname Denali Therapeutics why occur 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company IONS company|IONS name Ionis Pharmaceuticals significance PROMINENT company DNLI company|DNLI name Denali Therapeutics significance PASSING-MENTION djn BA djn|BA significance passing name BA why occur source FACTIVA fcode BA codetype djn code ba onlinesignificance passing-mention djn LQD djn|LQD significance passing name LQD why occur source FACTIVA fcode LQD codetype djn code lqd onlinesignificance passing-mention djn HYG djn|HYG significance passing name HYG why occur source FACTIVA fcode HYG codetype djn code hyg onlinesignificance passing-mention djn IONS djn|IONS significance passing name IONS why occur source FACTIVA fcode IONS codetype djn code ions onlinesignificance passing-mention djn DNLI djn|DNLI significance passing name DNLI why occur source FACTIVA fcode DNLI codetype djn code dnli onlinesignificance passing-mention djn WYNN djn|WYNN significance passing name WYNN why occur source FACTIVA fcode WYNN codetype djn code wynn onlinesignificance passing-mention djn 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$ High Yield Corporate Bond code hyg onlinesignificance passing-mention first_publish_headline The Dow Jones Industrial Average Just Had Its Worst Day Since 1987. Yes, You Can Call It Panic. first_publish_headline|The Dow Jones Industrial Average Just Had Its Worst Day Since 1987. Yes, You Can Call It Panic. flow Barrons.com flow|Barrons.com codetype FLOW name Barrons.com source MANUAL value Barrons.com code online status modified name Online title Product code Barrons.com flow Barrons Blogs flow|Barrons Blogs codetype FLOW source MANUAL title Product code Barrons_Blogs name Barrons Blogs value Barrons Blogs status modified headline The Dow Jones Industrial Average Just Had Its Worst Day Since 1987. Yes, You Can Call It Panic. headline|The Dow Jones Industrial Average Just Had Its Worst Day Since 1987. Yes, You Can Call It Panic. id facebook id|facebook news_tab_url https://www.barrons.com/articles/dow-jones-industrial-average-suffers-worst-day-since-1987-as-panic-take-holds-51584044419 index Dow Jones Industrial Average's index|Dow Jones Industrial Average's name Dow Jones Industrial Average's displayname Dow Jones Industrial Average symbol DJIA chartingsymbol INDEX/US/DOW JONES GLOBAL/DJIA exchange Dow Jones Global exchangeisocode DOW JONES GLOBAL country US significance prominent codetype index source MANUAL status modified extractedtext Dow Jones Industrial Average's code djia onlinesignificance prominent index S&P 500 index|S&P 500 name S&P 500 displayname S&P 500 Index symbol SPX chartingsymbol INDEX/US/S&P US/SPX exchange S&P US exchangeisocode S&P US country US significance prominent codetype index source MANUAL status modified extractedtext S&P 500 code spx onlinesignificance prominent inset inset-1 inset|inset-1 responsive layout wrap inset inset-2 inset|inset-2 responsive layout inline media media-5 media|media-5 responsive layout wrap softcrop Resize Only imphotoid im-163840 location https://images.barrons.com/im-163840/?size=custom_3000x1500 media media-4 media|media-4 responsive layout inline media media-1 media|media-1 softcrop Resize Only imphotoid im-163840 location https://images.barrons.com/im-163840/?size=custom_3000x1500 media media-2 media|media-2 imphotoid im-163838 media media-3 media|media-3 imphotoid im-163840 nwchain SB524127563839887334529045862574602783568041 nwchain|SB524127563839887334529045862574602783568041 pe 509246 pe|509246 visible 1 displayname Donald Trump confidence 90 why occur extractedtext Donald Trump source FACTIVA title President and chief executive officer relevance 50 seoname donald-trump significance passing topicid 159 name Donald Trump confidencerange high topicname Donald Trump relevancerange low fcode 509246 codetype pe code 509246 nameformat surname_first onlinesignificance passing-mention pe Andrew Brenner pe|Andrew Brenner firstname Andrew lastname Brenner displayname Brenner, Andrew name Andrew Brenner extractedtext Andrew Brenner source FACTIVA codetype pe code andrew_brenner nameformat surname_first pe Josh Schimmer pe|Josh Schimmer firstname Josh lastname Schimmer displayname Schimmer, Josh name Josh Schimmer extractedtext Josh Schimmer source FACTIVA codetype pe code josh_schimmer nameformat surname_first pe Larry Kudlow pe|Larry Kudlow firstname Larry lastname Kudlow displayname Kudlow, Larry name Larry Kudlow extractedtext Larry Kudlow source FACTIVA codetype pe code larry_kudlow nameformat surname_first pe Washington pe|Washington lastname Washington displayname Washington name Washington extractedtext Washington source FACTIVA codetype pe code washington nameformat surname_first pe WYNN pe|WYNN lastname WYNN displayname WYNN name WYNN extractedtext WYNN source FACTIVA codetype pe code wynn nameformat surname_first pe 110608532 pe|110608532 lastname Lagarde codetype pe displayname Lagarde, Christine why occur extractedtext Christine Lagarde source FACTIVA title Finance Minister seoname christine-lagarde name Christine Lagarde nameformat surname_first relevancerange low fcode 110608532 visible 1 confidence 90 code 110608532 relevance 41 significance passing firstname Christine topicid 6594 confidencerange high topicname Christine Lagarde onlinesignificance passing-mention relay SYND relay|SYND codetype RELAY name Syndication source EXPANDER value SYND code synd status modified statistic CODES_REVIEWED statistic|CODES_REVIEWED name CODES_REVIEWED value CODES_REVIEWED codetype STATISTIC code CODES_REVIEWED subject BARMKTS subject|BARMKTS codetype SUBJECT selectable true title Markets code BARMKTS name Markets canbedisplaysubject true ruleid BARMKTS value BARMKTS status modified subject BARMKTNOW subject|BARMKTNOW codetype SUBJECT title Markets Now code BARMKTNOW name Markets Now ruleid BARMKTNOW value BARMKTNOW canbedisplaybrand true status modified subject BARVOLAT subject|BARVOLAT ruleid BARVOLAT codetype SUBJECT value BARVOLAT canbedisplaysubject true name Volatility title Volatility status modified code BARVOLAT wordcount 748 wordcount|748 The Dow Jones Industrial Average Just Had Its Worst Day Since 1987. Yes, You Can Call It Panic. The Dow Jones Industrial Average Just Had Its Worst Day Since 1987. Yes, You Can Call It Panic. Dow Jones Industrial Average Suffers Worst Day Since 1987 as Panic Takes Hold

The Dow Jones Industrial Average tumbled 2353 points, or 10%, on Thursday, its worst drop since 1987, and some Treasuries fell too.

Panic Takes Hold

Even after a brief comeback in response to news of the Federal Reserve’s move, the Dow fell 2,353 points, or 10%, today. Treasuries fell too.

Panic Takes Hold

Even after a brief comeback in response to news of the Federal Reserve’s move, the Dow fell 2,353 points, or 10%, today, its worst drop since 1987.

Panic Takes Hold

Even after a brief comeback in response to news of the Federal Reserve’s move, the Dow fell 2,353 points, or 10%, today—its biggest one-day percentage drop since 1987. Treasuries fell too.

https://www.barrons.com/articles/dow-jones-industrial-average-stocks-worst-drop-since-1987-51584045217 https://www.barrons.com/articles/treasury-yields-volatility-fed-bonds-notes-51584020352 https://www.barrons.com/articles/the-corporate-debt-death-spiral-shows-no-signs-of-stopping-51584023200 https://www.barrons.com/articles/companies-draw-down-their-credit-lines-should-investors-be-worried-51584039814 https://asset.barrons.com/dynamic-insets/charts/cdc_5d57048ccc5e0fddb7f01fe0.json https://www.barrons.com/articles/why-president-donald-trumps-speech-spooked-the-stock-market-51584026366?mod=hp_DAY_5 https://www.barrons.com/articles/ecb-interest-rates-stock-markets-coronavirus-51584022860 https://www.barrons.com/articles/dow-regains-some-losses-after-fed-announces-massive-funding-51584033883?mod=hp_LEAD_1 mailto:Ben.Levisohn@barrons.com The Dow Jones Industrial Average Just Had Its Worst Day Since 1987. Yes, You Can Call It Panic. By Ben Levisohn *** ONE-TIME USE ***

That was not good. Not just the Dow Jones Industrial Average’s decline, which was the largest since 1987. That was obviously bad. But everything that went along with it—the rising bond yields, the falling gold price, the drop in corporate bonds—despite the fact that the Federal Reserve acted to stabilize the Treasury market. And it might not get better without some major action from global central banks and governments.

But I’m getting ahead of myself. The Dow tumbled 2353 points, or 10%, on Thursday, while the S&P 500 fell 9.5%. Those numbers are absurd, worse than we saw during the financial crisis after Lehman went bust. The Stoxx Europe 600 had its worst day on record. I thought I saw the scariest market I would ever see in 2008. I was wrong.

At least back then Treasuries would gain in value when stocks dropped. That didn’t happen today, even though the Dow dropped 10%. The yield on the 10-year Treasury rose 0.025 percentage point to 0.842%, which means someone was selling them, because prices fall a yields rise. Think about that. These are supposed to be the safest assets in the world, and they are losing value. That’s not supposed to happen.

But that was nothing compared with what happened to corporate bonds. The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) dropped 4%, while iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) dropped nearly 5%. You read that right. ‘Risky’ junk bonds fell less than ‘safer’ investment-grade corporate bonds. Gold, another supposed haven, fell more than 4%.

What’s going on? Nearly everyone is going to cash. That makes sense. Business around the world are shutting down, and without government help, many will be going bust without central bank and government assistance. Companies like Boeing (BA) and Wynn Resorts (WYNN) have been drawing down revolvers to make sure they have enough cash on hand. Mutual funds are forced sellers as investors withdraw cash.

https://asset.barrons.com/dynamic-insets/charts/cdc_5d57048ccc5e0fddb7f01fe0.json

Government is falling down on the job. U.S. President Donald Trump couldn’t end the stock market’s losing streak when he spoke last night. The ECB’s Christine Lagarde caused a selloff in European bonds when she said it wasn’t her job to worry about spreads, and the U.S. still hasn’t announced a fiscal package to help struggling companies and workers. The Federal Reserve tried to do its part by announcing that it would provide at $1 trillion in funding a week to keep credit markets working, but to no avail. Until governments figure out how to stop the panic, don’t expect that to stop.

“Equity markets [are]...trying to send Washington a message,” writes NatAlliance Securities’ Andrew Brenner. “The question is whether Larry Kudlow is listening...And whether we start to hear of talk of some economic summit or meeting over the weekend.”

But as many in the market are panicking, others are looking for bargains. Evercore ISI’s Josh Schimmer for upgraded two stocks after the close: Ionis Pharmaceuticals (IONS) and Denali Therapeutics (DNLI). He’s worth quoting in full. “What’s that phrase about blood in the streets? We’ve given up 3 years of hot market performance. Could we give up more? Sure, who knows when the pandemic pandemonium will fade. But it will pass, and there will still be important unmet needs to address. And there will be all sorts of fiscal stimulus to help the economy survive.”

And you know what? He’s probably right.

Write to Ben Levisohn at Ben.Levisohn@barrons.com