U.S. stock futures, which were way down and way up overnight, were pointing to a higher open on Monday after Wall Street's worst week since the 2008 financial crisis. Last week, concerns about the spread of the coronavirus and the economic impact of the outbreak knocked 3,500 points off the Dow Jones Industrial Average. The Dow, S&P 500 and Nasdaq sank into a correction territory, defined by moves of 10% or more from recent highs. Since its intraday all-time high on Feb. 12, the Dow was 14% lower as of Friday's close. The S&P 500 and Nasdaq were nearly 13% off their Feb. 19 intraday records. While Friday saw the Dow lose another 357 points, blue chips rallied in the final minutes of trading. The Dow had been off nearly 1,100 points earlier in Friday's session.
Investors were still buying U.S. government bonds in a perceived move to safety. The 10-year Treasury yield, which trades inversely to price, hit an all-time low overnight below 1.04%, before recovering somewhat. The 2-year Treasury yield fell to 0.71%, threatening to break its November 2016 low. The 30-year yield was around 1.62%, a record low. With stocks and bond yields cratering, the market sees a Federal Reserve interest rate cut as a lock. The debate has moved to just how much.
Goldman Sachs thinks the Fed will likely announce a 0.5% rate cut at, or even before, its March 17-18 meeting. Goldman then sees the Fed cutting another 0.5% later this year. The current fed funds rate range is pegged between 1.5% and 1.75%. The Fed reduced rates three times last year. On Friday afternoon, Chairman Jerome Powell said the coronavirus "poses evolving risks" and that officials "will use our tools and act as appropriate to support the economy." Former Fed Governor Kevin Warsh told CNBC on Friday the Fed and other global central banks should act in unison.
Worldwide coronavirus cases approached 90,000 overnight with 3,048 deaths, according to Johns Hopkins. While the vast number of cases and fatalities are still in China, where the virus originated, the U.S. confirmed its second coronavirus death over the weekend, both near Seattle. New York City reported its first coronavirus case Sunday night, a woman who recently traveled to Iran. Total U.S. cases were 86. Italy continues to have the most cases in Europe, around 1,600, while South Korea has the most cases outside China, at about 4,300. President Donald Trump tweeted Monday morning, "I am meeting with the major pharmaceutical companies today at the White House about progress on a vaccine and cure."
Former Vice President Joe Biden, who stumbled early on, hopes to take the momentum from his comfortable South Carolina primary victory into Super Tuesday, when 14 states hold contests that collectively award a third of the total delegates in the race for the Democratic presidential nomination. Sen. Bernie Sanders, who scored strong results in Iowa, New Hampshire and Nevada, still leads the delegate count with 60. Biden moved into second with 53. Ex-Mayor Pete Buttigieg was in third with 26 delegates, but he dropped out of the race on Sunday. Sen. Elizabeth Warren was fourth with just eight delegates. But her campaign released a memo on Sunday describing the Democratic National Convention in July as her "final play" for Warren and committing to fight for delegates for as long as she can until then. Billionaire Tom Steyer also dropped out Sunday. Latecomer to the race, billionaire former New York Mayor Mike Bloomberg, will be on ballots for the first time on Super Tuesday.