Coronavirus panic is a result of 'proximate causes': Grant's Interest Rate Observer founder

The typically stable treasury market has been extremely volatile in the past week and now interest rates are going back up, even after unprecedented cuts for the Fed. Jim Grant, founder and editor of Grant's Interest Rate Observer, joins "Squawk Box" to discuss.

Stocks jumped on Thursday, erasing steep losses from earlier in the day as sharp gains in big-tech shares led to a sharp turnaround.

The Dow Jones Industrial Average traded 440 points higher, or 2.2%. The S&P 500 was up 2% while the Nasdaq Composite outperformed with a 4% surge. Shares of Netflix and Facebook rose 9% and 7.6%, respectively. Amazon gained 5.3%.

Earlier in the session, the Dow was down 721 points, or more than 3%. The S&P 500 briefly fell more than 3% as well.

“This is a day trader’s market,” said Christian Fromhertz, CEO of Tribeca Trade Group. “That’s not my favorite type of trading, but the day-to-day swings and the overnight moves are pretty insane.”

Among the industries trading in positive territory Thursday morning was energy, with the S&P sector up more than 0.5%. Big oil producers like Diamondback Energy and Apache rose more than 15% each as futures contracts tied to the price of West Texas Intermediate crude rallied more than 22% to $25.04 per barrel.

The moves followed yet another violent day on Wall Street on Wednesday. The Dow dropped 1,338.46 points, or 6.3%, on Wednesday and clinched its first close below 20,000 since February 2017. The Dow was down more than 2,300 points at the lows of the session. The S&P 500 dropped 5.2% to 2,398.10 and closed nearly 30% below a record set last month as both indexes sank further into bear markets.

“Markets are clearly in a state of panic and forced liquidations – but risks remain skewed to the upside and this should become much more apparent once some of the solvency issues are addressed,” Adam Crisafulli, founder of Vital Knowledge, said in a note.

Wall Street has been on an unprecedented roller-coaster ride amid the coronavirus turmoil, with the S&P 500 swinging 4% or more in either direction for eight consecutive sessions.

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