London Daily

Focus on the big picture.
Wednesday, Oct 22, 2025

Goodbye, Dow 30,000! Hello, Dow 10,000?

Goodbye, Dow 30,000! Hello, Dow 10,000?

At least 129.8 million Americans were ordered to stay home by their respective state governments. No malls. No movies. No bars. No social gatherings of 10 more. Spring break has been cancelled. DisneyWorld is closed. It is probably only a matter of time before all domestic travel is banned, except for emergency situations.
We’re pretty close.

American Airlines last week announced a 75% cut to its operations, while United plans to cut 90% of international services scheduled for April. At this point who is flying other than a doctor? And if not a doctor, where are these people going? Easter Island?

The recession that well-known comedian and HBO show host Bill Maher hoped for and Bloomberg headline writers were firing off incessantly last year for reasons that were both political (Maher) and financial (inverted yield curve) may be coming after all.

If half the country can basically only go to the supermarket, the pharmacy and the doctor’s office over the next two weeks, with skeleton crews at warehouses and manufacturing plants and the only people who can be productive are those who can work from home, then what are we to think when the other half of the country faces the same set of circumstances?

On Friday, Barclays lowered its forecast for the U.S. economy in 2020, going from around 0.8% to -0.6%.

The Federal Reserve and Treasury are working on financing programs that could be worth $4 trillion, Treasury Secretary Steven Mnuchin said Sunday on FOX.

That’s double what National Economic Advisor Larry Kudlow put out there on Friday.

Today’s number from Mnuchin is part of a bipartisan stimulus effort that includes the unlimited checkbook of the Fed to get liquidity and cash to businesses that need it most.

The longer national-shutdown guidelines remain in place, with 8 state governments as of Sunday closing all "non-essential" businesses statewide, the more economic growth will be suppressed.

Short term loans to small businesses will be needed to help companies not only cover payroll so as not to fire workers, but to cover other things, like leases. Who doubts a debt moratorium is right around the corner?

In China’s case, draconian measures took economic growth offline for about two months. If the U.S. did, it would mean a loss of about 16% of economic growth in a full calendar year, analysts from Bretton Woods Research, a boutique, macro investment research firm in New Jersey wrote in a note to clients over the weekend.

Friday’s drop in equities was due to a spate of lockdowns, namely in California and New York. It is only a matter of time before all 50 states follow.

“In the near-term, there’s no reason to hold equities so long as the shutdowns continue and spread,” says Vladimir Signorelli, head of Bretton Woods Research. “Frightening valuations could be in store, such as Dow 14,500 or even 10,000.”

The 12 states with the highest number of COVID-19 illnesses reported as of Friday account for nearly 60% of U.S. GDP, based on 2018 Bureau of Economic Analysis figures.

The pandemic has rolled back all of the stock market gains of the Trump presidency, but few with any market sense would blame government for the market’s reaction to the fast spreading virus.

The global pandemic has also helped crash commodities. Oil was already in trouble thanks to a breakdown in OPEC production talks with Russia two weeks ago. West Texas crude closed at $22.43 a barrel on Friday and hit $20.37 on Wednesday. Worth remembering, oil was $45.90 on March 5, just before the Saudi-Russia sell-off began.

At least $26 trillion in global market capitalization has been lost since February. While that is mostly all speculative capital, it is a sentiment indicator for publicly traded businesses who take on less risk when they see their share price in free fall.

Retirees, insurers, college endowments, all have a lot less money saved today than they did four short weeks ago.

Meanwhile, in the EU, politicians are trying to reassure the public on one hand, while warning that nearly two-thirds of the populous will catch the bug on the other. With mortality rates in Italy raging over 9%, a two-thirds infection rate would bring war death tolls.

For that reason, the market sell-off isn’t over yet.

Futures in Asia point to some significant downside following the U.S. equity market sell-off late Friday.

“We expect the next wave to be continued profit warnings, defaults and a collapse in economic indicators,” says Sebastien Galy, senior macro strategist at Nordea Asset Management in Luxembourg. “Over time the Fed and U.S. Government will win the day. We should increasingly find a firm footing.”
Newsletter

Related Articles

0:00
0:00
Close
‘Frightening’ First Night in Prison for Sarkozy: Inmates Riot and Shout ‘Little Nicolas’
White House Announces No Imminent Summit Between Trump and Putin
US and Qatar Warn EU of Trade and Energy Risks from Tough Climate Regulation
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Nicolas Sarkozy begins five-year prison term at La Santé in Paris
Japan stocks surge to record as Sanae Takaichi becomes Prime Minister
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
Surging AI Startup Valuations Fuel Bubble Concerns Among Top Investors
Australian Punter Archie Wilson Tears Up During Nebraska Press Conference, Sparking Conversation on Male Vulnerability
Australia Confirms U.S. Access to Upgraded Submarine Shipyard Under AUKUS Deal
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
Brands Confront New Dilemma as Extremists Adopt Fashion Labels
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Erika Kirk Delivers Moving Tribute at White House as Trump Awards Charlie Presidential Medal of Freedom
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
×