- Coronavirus fears sent the Dow Jones over 3% lower on Friday as bond prices soared and yields crashed.
- Despite plunging interest rate expectations, the Dow is still struggling to find any support.
- Fed President James Bullard believes confidence in central banks is eroding rapidly.
The Dow Jones fell more than 800 points to close the week as investors continued to sour on stocks amid the spread of the coronavirus around the world.
Federal Reserve President James Bullard believes that central banks are losing credibility, a view confirmed by Deutsche Bank analysts who claim “policy failure is here.”
Dow Jones Falls as Crude Oil & Bond Yields Crash
All three major U.S. stock market indices accelerated their losses ahead of the closing bell.
- The Dow crashed 827.9 points or 3.17% to 25,293.38.
- The S&P 500 slid 3.91% to 2,906.64.
- The Nasdaq plunged 4% to 8,388.94.
In the commodity sector, crude oil had its worst day since 2015, diving more than 10% to $41.23 per barrel after OPEC+ failed to secure a deal with Russia.
The gold price soared in late afternoon trading, rallying more than 1% to $1,685.
Defying the drop in global equities, the United States jobs report was quite positive, with strong non-farm payrolls, unemployment, and flat wages.
Yet Wall Street disregarded the move, likely because the dates in question precede the impact of the coronavirus outbreak in the U.S. and Europe.
Fed President James Bullard: Confidence Is Eroding In Central Banks
After the Federal Reserve made an emergency rate cut of 50 basis points on Monday, Dow bulls were hopeful that this measure might restore some confidence in a shaky stock market.
This move, coupled with skyrocketing expectations for more cuts, has so far proven to be ineffective and has many economists criticizing the FOMC for what appears to be a significant policy mistake.
St. Louis Fed President…