Stocks slide Monday as COVID-19 takes hold of U.S. economy, Memphis companies feel impact
MEMPHIS, Tenn. (WMC) - It was a historic day on Wall Street, for all the wrong reasons. The Dow Jones Industrial Average notched its worst day since 2008, the year of the global financial crisis.
WMC Action News 5 talked to two Memphis-area financial experts Monday. Both said the situation is serious, and it's unclear how long the uncertainty will last.
“A very dramatic downturn in the market,” said David Pickler, President & CEO of Pickler Wealth Advisors. “We don’t need to overreact, but we need to embrace the seriousness of the issue.”
Monday’s 2,000 point slide by the Dow Jones Industrial Average marked the worst day for the market since 2008.
Collierville financial planner David Pickler said there’s a perfect storm setting up over the U.S. economy between a crude oil price war and COVID-19.
But Pickler said don’t let your 401k losses cause panic.
“For long-term investors, this may be nothing more than a short-term episode and something that we simply have to overcome,” said Pickler.
The question looms as to what President Donald Trump will do. CNBC reports aides to the president are expected to present ideas for an economic stimulus package. The president has invited Wall Street executives to meet Wednesday over their COVID-19 concerns.
“The time for action is now. We know investors are looking for action, and we know the markets are looking for action,” said Pickler. “You don’t want to try to catch a falling knife. We don’t know what the bottom of the market will be.”
Trip Miller is the founder of Gullane Capital Partners in Memphis.
He said any congressional stimulus aimed at hospitality industries like airlines and hotels would help, but it would be slow to arrive.
“It’s going to be a rough ride we think here for the, certainly, next few months,” he said.
Because COVID19 is a health crisis at its core, Miller said the money will not fix everything.
“The reality is, if we have a global health pandemic, no matter how much you throw at it, that’s not going to solve the problem. The economic slowdown is a symptom of the health problem,” Miller said.
There will be different reactions to the economic downturn based on industry, Miller said.
For example, Memphis-based FedEx is expected to see disruptions to its global supply chain, meaning negative impacts for the firm. FedEx stock was down almost ten percent Monday.
But Memphis-based AutoZone stock closed up nearly five percent Monday. That’s because in a down economy people tend to keep and work on cars longer.
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