Stock futures plunged Sunday night even after the Federal Reserve embarked on a massive monetary stimulus campaign to curb slower economic growth amid the coronavirus outbreak. While the central bank’s actions may help ease the functioning of markets, many investors said they would ultimately want to see coronavirus cases peaking and falling in the U.S. before it was safe to take on risk and buy equities again.
Stock futures drop — hit ‘limit down’ — even as Fed slashes rates; Dow futures off 1,000 points https://t.co/RxO22vflUa— CNBC's Fast Money (@CNBCFastMoney) March 15, 2020
Stock market futures hit “limit down” levels of 5% lower, a move made by the CME futures exchange to reduce panic in markets. No prices can trade below that threshold, only at higher prices than that down 5% limit.
“I don’t think [the Fed] would have done this unless they felt the financial markets were at significant risk of freezing up tomorrow. They’re very concerned the financial markets won’t work. So I don’t know how the markets take solace in this.” Mark Zandi, chief economist of Moody’s Analytics, told CNN Business.The Fed last cut rates to zero during the global financial crisis just over a decade ago.