The rapidly deteriorating health of the financial markets is being driven by a contagion of fear and uncertainty about a global pandemic that's infecting the economy in ways that seemed unfathomable just a month ago.
FILE - In this Wednesday, March 18, 2020, file photo, trader Gregory Rowe works at the New York Stock Exchange, in New York. The rapidly deteriorating health of the financial markets is being driven by a contagion of fear and uncertainty about a global pandemic that's infecting the economy in ways that seemed unfathomable just a month earlier.
Now, those thoughts seem like pipe dreams as people mostly wonder if and when life will be normal again during a week that has seen most commerce shut down in Silicon Valley — a vital cog in the economy — against the backdrop of canceled St. Patrick’s Day traditions throughout the world. The market’s wild swings have been exacerbated by the computerized trading programs that hedge funds create to wager on the financial market’s up and downs. Those algorithms, coupled with the lightning speed of today’s computer programs, can vastly accelerate the momentum of selling frenzies, as well as seemingly irrational buying binges.
On Wednesday, that relationship fell apart too, as investors even sold safe haven assets to raise cash. That helped create a virtuous cycle as consumers spent more and employers steadily expanded their payrolls as their profits rose as more people got jobs. “Those numbers that in the past would say, ‘OK, you’re definitely at a bottom,’ don’t mean that right now because there hasn’t been evidence that’s taken place,” said Willie Delwiche, an investment strategist at Baird. “It’s extreme markets becoming more extreme, so then your boundaries of what’s extreme need to change with it.”
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