Chinese President Xi Jinping makes a shocking admission that his country failed to contain the coronavirus outbreak. The confession is a clear sign that the Communist Party can no longer control the narrative around the infectious disease.
The Dow crashed as much as 1,000 points on Monday as the spread of coronavirus in Italy and South Korea heightened concerns about a global pandemic. Adding to the worries, a surprising admission of guilt from Chinese premier Xi Jinping suggested the coronavirus is far from being under control in China.
All three major U.S. equity indexes dove sharply when exchanges opened on Monday and failed to mount a recovery as the morning gave way to afternoon trading.
The Nasdaq plunged 3.58% and the S&P 500 slid 3.12%. The Dow was off more than 3.2% after crashing more than 1,000 points at its lows.
In the commodity sector, the price of gold surged 1.6% to hit fresh multi-year highs above $1,680. WTI crude oil plummeted with the stock market, down 5.1% at $50.66.
Dow bulls may finally be forced to accept the economic reality of the coronavirus outbreak, as Chinese Premier Xi Jinping made an (exceptionally rare) admission that the virus has exposed several shortcomings in his government.
His use of the word “crisis” is quite shocking from the famously guarded government and is likely to have a negative impact on Wall Street’s nervous mood.
The timing of the announcement is unsurprising given that China can no longer control the dialogue around the outbreak. It has now taken root in Iran, South Korea, and Italy.