Great market for stock pickers: American Century Investments CIO

Jim Tierney, AllianceBernstein; Jamie Cox, Harris Financial Group; and Richard Weiss, American Century Investments, join 'The Exchange' to discuss the state of the markets during the market uncertainty.

The coronavirus-induced sell-off reached a new low on Wednesday as Wall Street grappled with the rapid spread of the virus as well as uncertainty around a fiscal response to curb slower economic growth from the outbreak.

The Dow Jones Industrial Average traded 1,466 points lower, or 5.9%, and was more than 20% below its record high set earlier last month. A 20% decline is considered a bear market on Wall Street. However, most investors don’t recognize it officially until the index does it on a closing basis. The Dow was on pace to do that Wednesday, whereas the S&P 500 is just below that closing threshold.

The S&P 500 is more than 19% from its closing record and traded 5.1% lower on the day. The Nasdaq Composite fell 5% and was also 19% below its all-time high.

“We can see the panic in the equity market,” said Jerry Braakman, chief investment officer of First American Trust. “The big question for most people is, are we at the bottom yet? I think we’re only about halfway there.”

The World Health Organization declared Wednesday the outbreak a global pandemic. The number of coronavirus cases around the world totaled more than 100,000, according to data from Johns Hopkins University. In the U.S. alone, more than 1,000 cases have been confirmed. This increase in cases added to fears of a global economic slowdown and have increased calls for government intervention.

President Donald Trump suggested Tuesday a 0% payroll tax rate that could last until the end of the year. However, the timing of such policies being implemented remains uncertain. Sen. Chuck Grassley, who heads the Senate Finance Committee, said such a tax cut needed to be examined.

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