Day: March 16, 2020

Brett Arends's ROI: Coronavirus dispatch from Hong Kong: We’re already through this. Here’s how we did it — and what life looks like on the other side

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“Hong Kong is definitely coming back to life” following a weeks-long coronavirus lockdown, says Adam Najberg, an American executive who’s been living in the territory for over a decade. “It’s clearly not bustling, and restaurants aren’t brimming with activity, but people are going out again, shopping again, walking on the streets.”

“You have to wait a bit for taxis, people are back on the subway and buses. Traffic is back, [the] subway is getting more crowded again, [and there’s] more foot traffic, too.”

Najberg spoke with MarketWatch via Facebook Messenger to describe his recent experiences in Hong Kong, and how the Chinese territory has dealt with the coronavirus outbreak.

“It was tense six weeks ago,” he said. “Uncertainty about how bad it might be was hanging over folks, especially those remembering SARS. Now, honestly, my two biggest personal concerns are about my kids in the U.S. and whether there is Diet Coke in the vending machine. The U.S. doesn’t get this, and the years of polarization and complacency and comfort lull people into not taking this seriously enough.”

Hong Kong is getting through this because the territory went to an emergency lockdown to stem the growing COVID-10 outbreak for three weeks in January and February, Najberg said. While the coronavirus has not been eradicated in Hong Kong, the territory has managed to severely slow the spread of the illness. According to the Johns Hopkins coronavirus tracker, Hong Kong has had a total of 155 confirmed cases, out of a population of 7.4 million.

Najberg said had to work from home for a few weeks. “Everyone masked up, work from home was implemented, [and] many companies have alternating shifts of staffers at the office, even though we’re back now,” he said. The territory did an enormous number of tests and quarantined the sick.

Adam Najberg
Hong Konger Adam Najberg, modelling the new facewear in the post-COVID-19 world.

“Many companies followed the government’s lead — [civil] servants, except for critical and health services, worked from home. Buildings and compounds — and individual companies — put [their] own containment and safety measures in place, too. My gym in my compound shut temporarily. The club restaurant delivers, but they stopped dine-in service. I joined another gym temporarily, paying their fee. They have temperature checks in place and scrub every surface religiously after equipment use.”

“Its peak looks to have passed here. They’ve done a pretty solid job containing it. When you read the stories, it’s a bit crazy how they cherchez le virus.”

Meanwhile, much of the rest of the world is in chaos or bracing for impact.

So what is the new normal on the other side of this thing?

“We came back to the office in shifts, not everyone at once,” Najberg said. “We all fill out daily health-check surveys online. They take about 15-30 seconds. And did it work? It worked to help ensure social-distancing. When we returned, we entered only through the doors on one floor, had our temperatures checked, stepped on a disinfection carpet outside the door and then put on a mask to go to our desks. I keep my mask on when I’m walking the floor and when I’m in public spaces. The building took over temperature checks, using a FLIR scanner at the entrance to the office towers. You don’t have to stop. You just walk past the scanner and it checks temperatures. And entrances on multiple floors have reopened. We still mask up inside the office and in public spaces.

“So, did it work? So far, seems to be fine. We also adhere to Hong Kong’s travel and self-quarantine policies and have our own company policies to keep those who might have been exposed and others around them safe, which means if you’ve had contact with someone or traveled somewhere where there is a virus risk, you do work-from-home until you’re allowed back and it’s clear you’re not ill.”

“You get a temple-checked thermometer reading at many places…. Hand sanitizer everywhere. Elevator buttons disinfected once an hour, offices deep disinfected once a week, etc. My building still takes my temperature every time I come back from Starbucks. Elevator buttons are covered with plastic that is disinfected every hour.”

In the new normal, most people wear masks when they’re out, Najberg said. If you go to a restaurant, you take them off only when you get inside. There is debate about how useful masks are in helping protect against the disease. Najberg said they work for another reason.

“The masks are more a sign to keep your distance. And it works. Plus, you touch your face less when wearing a mask.

“I’m told this is what SARS was like. They were not ready for SARS. My observation in returning to [Hong Kong] 10 years ago was that it was much cleaner than before. SARS led to hygiene and a major upgrade in pandemic preparedness. This is THE place to be when you have a health crisis. They are ready for quarantine. They already have several quarantine camps.

“The thing I’d say about Hong Kong, after living here nearly 10 years this time — and 15 in total — is that people here follow social ‘protocol’ and are respectful of measures to contain illness. Yes, there was some panic-buying of toilet paper, rice and noodles and some oils, but overall, it has been very orderly. People take this extremely seriously from government on down, and they listen and care about the health and safety of others, not just themselves.”

This report is part of a MarketWatch series, ‘Dispatches from the front lines of a pandemic.’

America’s growing elderly population is at risk — here’s what we can learn from Italy

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Cities across the United States are closing down schools and nonessential establishments, such as bars and movie theaters, in an attempt to curb the number of coronavirus cases — and avoid the unfortunate situations that have occurred in Italy, China and elsewhere.

The mission is this: Keep as many people at home to avoid spreading the disease, especially considering not everyone shows signs of the coronavirus but could still be carriers, and protect all citizens, especially the most vulnerable, including the elderly and those with heart and lung diseases.

The problem: Some of these countries — the U.S. included — have an aging population, which increases the risks associated with those who come in contact with the coronavirus, also known as COVID-19.

“What you’re now hearing repeatedly is that people over 60 and people who have chronic conditions are most at risk of coronavirus,” said Paul Irving, chairman of the Milken Institute Center for the Future of Aging. “That does create serious concerns for older Americans.”

Italy is currently the hardest hit country in Europe, and has the second highest number of confirmed cases and deaths from the coronavirus, behind China, where the spreading of the infectious disease began in December. The Southern European country just saw its highest number of cases within a 24-hour period over the weekend — an increase of 3,590 cases and 398 deaths, officials said on Sunday.

See: Canceled markets, restaurant curfews and no-double kissing — What Italy is like for this American retiree living abroad

The U.S. is not far behind Italy’s trajectory of coronavirus cases, the U.S. Surgeon General said on Monday. The country now has as many cases as Italy did two weeks ago. “We are at a critical inflection point in our country,” Dr. Jerome Adams said on a segment of “Fox & Friends.

Data surrounding the deaths linked to the coronavirus are still preliminary, but many news reports have found elderly patients have succumbed to the disease. In the United States, Washington state has seen the most deaths, many of which were linked to an outbreak at a nursing home in Kirkland, Wash. in February. A total of 26 patients at the Life Care Center of Kirkland have died between Feb. 19 and March 13, the center said in an update on Friday, and more than half of its residents had been moved to hospitals. New York City, which just shut the nation’s largest public school system for a month, has had five cases as of Sunday night, including two people in their 50s, two people in their late 70s and one woman in her 80s.

The average age of those who died in Italy was 81, and many suffered from pre-existing health issues, the BBC reported. Of the cases in China, the death rate among those 80 and older was 14.8%, according to a Chinese CCDC report last updated in the middle of February when there were approximately 72,000 confirmed cases. Those between 70 and 79 years old had a death rate of 8%. Comparatively, people in their 20s and 30s each had a death rate of 0.2%, according to Worldometers, which aggregated global reports related to coronavirus.

“There’s a risk to the broader population as well, but we really need to focus on protecting our elders,” Irving said. “The older a disease-sufferer, the higher the risk.”

Most countries are seeing an uptick in elderly citizens, but Italy’s rate is especially high — it is the country with the third highest elderly population. More than 21% of the population is “elderly,” defined as people 65 and older, according to the Organization for Economic Cooperation and Development. Germany, the country with the sixth highest number of confirmed coronavirus cases, has just slightly more older citizens (21.45% versus Italy’s 21.25%), according to the OECD.

While only 14.50% of the United States’ population is 65 and older, that figure is expected to jump within the next decade. Since the beginning of 2011, about 10,000 people have turned 65 years old each day, and they will continue to do so until 2030, according to nonprofit think tank Pew Research Center. Then, about 18% of the country will be 65 or older.

Also see: Be on the lookout for COVID-19’s hidden cost to older people

There are more than 175,000 confirmed cases of coronavirus around the globe, according to Johns Hopkins Whiting School of Engineering’s Center for Systems Science and Engineering. China has seen about 81,000 confirmed cases, while Italy has had nearly 25,000, followed by Iran with 15,000. More than 6,700 people have died from the coronavirus in the world, a little less than half of which occurred in China and 1,800 of which were in Italy.

The United States has more than 4,000 confirmed cases of the coronavirus, and 69 deaths. Japan, which has the highest ratio of an elderly population at 25%, has only had 825 confirmed cases so far.

It’s important to keep the numbers in perspective, said Richard Jackson, president and founder of the Global Aging Institute. The number of confirmed cases has not yet been determined, considering there is not universal testing of citizens around the world for those with and without symptoms, so mortality rates may appear higher now than they will be when this subsides. As is the case in Italy, having an older population naturally increases the mortality rate, he said.

Federal, state and local responses to the coronavirus, including shutting down large gatherings of people like sporting events, universities and Broadway shows, will be key to slowing down the spread of the virus, Irving said. Critics argue the U.S. should have acted sooner, after seeing how quickly the disease spread in China, and experts say Americans need rapid diagnostic testing. The government is working with the private sector to make those tests more accessible in the coming weeks, Rick Bright, director of the country’s Biomedical Advanced Research and Development Authority, told NPR on Friday.

The Centers for Disease Control and Prevention has recommended all Americans, but especially older people, to stay indoors, stock up on necessary food and medications and reduce contact with others for the foreseeable future. The CDC also strongly urges people to wash their hands with soap and water for 20 seconds, avoid touching their faces and use hand sanitizer with at least 60% alcohol when soap is not available.

More from MarketWatch

Personal Finance Daily: The Fed dropped interest rates to 0% — what that means for your credit cards and bank accounts and how long will coronavirus last?

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Take care of yourselves MarketWatchers. Don’t miss these top stories:

A rare win for Gen X? Boomers gave us latchkey childhoods that prepped us for coronavirus quarantine

Is Generation X — the legion of latchkey kids for whom the waning Cold War forced futile school drills — better able to self-soothe under the confines of a coronavirus quarantine than Gen Z, millennials and baby boomers?

These industries will be hardest hit by the coronavirus pandemic — but one sector will likely remain ‘recession-proof’

As the government continues to introduce measures to slow the spread of the virus and promote the best ways to guard against it, some employers may be reluctant to let their staff go just yet.

‘The lack of an all-island response has rattled communities on both sides of the Irish border’: Ireland braces for coronavirus

For more than a week, a debate raged over whether the traditional St Patrick’s Day festivities should be canceled.

‘They’ve likened it to a war where the casualties just keep on coming’: Italians find solidarity, resilience and music during the coronavirus lockdown

Two people stop to greet each other while walking their dogs. A voice from a window shouts: ‘Andate a casa!’ (‘Go home!’)

The Fed dropped interest rates to 0% — what that means for your credit cards and bank accounts

You won’t have to pay as much in credit-card interest soon, but that doesn’t mean you’ll see big savings because of the latest Fed cuts.

Do you still hear people say coronavirus is just like flu? They’re wrong — here’s why

President Trump suspended all travel to the U.S. from Europe, and declared a national emergency over COVID-19’s rapid spread.

Is coronavirus airborne? Will it survive for days on bathroom surfaces? Are men more at risk? Burning questions about COVID-19

As stock markets plunge and airlines wonder how they will stay viable, some outlandish rumors about COVID-19 still persist.

How long will coronavirus last? It depends — but ‘prepare yourself for a long ride’

‘Ironically, part of success here is ensuring that this lasts a lot longer than it otherwise might,’ one expert said of COVID-19.

How much do you tip the delivery person and Uber driver during the coronavirus pandemic?

The Moneyist breaks down what is appropriate to tip service-industry workers during the COVID-19 outbreak.

Tennessee man donates his almost 18,000 bottles of hand sanitizer after furious backlash

Matt Colvin says ‘it was never my intention to keep necessary medical supplies out of the hands of people who needed them.’

Elsewhere on MarketWatch
Romney, other lawmakers call for sending $1,000 checks to Americans as part of coronavirus response

As Congress considers stimulus measures to help Americans who are facing financial problems because of the coronavirus outbreak, some lawmakers are calling for the government simply to put checks in the mail.

A feckless Fed, huge deficits and poisonous politics have brought us to a crisis

Real obstacles to the fiscal stimulus America now needs to fight the damage caused by coronavirus.

Trump says ‘market will take care of itself’ as Dow plummets 3,000 points

President Donald Trump on Monday said the stock market would “take care of itself” as the Dow Jones Industrial Average plunged nearly 3,000 points.

These steps are crucial to help small businesses survive until the pandemic passes

The coronavirus will have long-lasting economic implications — much worse than the global financial crisis — if policy makers don’t move quickly to address the immediate needs of small firms.

Senate seen passing coronavirus bill around midweek; lawmakers also work on more aid

The Republican-led Senate appears on track to pass a bipartisan coronavirus bill around the middle of the week. Lawmakers also are working on other measures to aid Americans, small businesses and other sectors of the economy.

Top U.S. business lobby urges payroll tax suspension, emergency loans for all

The nation’s largest business group is calling on Congress to suspend payroll taxes for employers and make emergency loans available to big and small companies to help them get through the economic shutdown caused by the coronavirus.

Fed injects a big dose, but it’s got the wrong medicine for the coronavirus pandemic

Traditional monetary-policy medicine may not be up to the task of addressing a pandemic that has disrupted financial markets and shut down large swaths of the economy.

‘It’s a great time to go out’: California Republican Devin Nunes talks about life amid the coronavirus pandemic

“Let’s not hurt the working people in this country that are relying on wages and tips to keep their small business going,” Nunes told Fox News. “So don’t run to the grocery store and buy, you know, $4,000 of food, go to your local pub.”

How the Dow’s coronavirus plunge shows investors are fast-forwarding the ‘2008 playbook’

The stock-market plunge inspired by the global COVID-19 outbreak shows investors are taking cues from the 2008 financial crisis, but at an accelerated pace, says DataTrek’s Nicholas Colas.

Apple Card customers can defer payments amid coronavirus outbreak, Goldman Sachs says

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Goldman Sachs Group Inc. GS, -12.71% said it will allow Apple Card customers to skip their March payments without incurring interest, Bloomberg reported. The bank is also allowing borrowers who have loans through Goldman’s online platform Marcus to postpone their loan payments. The move comes as the coronavirus pandemic has led to many business closures and forced many to go without pay. Apple Card AAPL, -12.86% holders were notified of the ability to postpone payments over the weekend. Those who need assistance were encouraged to contact customer support via the Messages app. Tens of thousands of Apple Card customers had taken advantage of the offer as of Sunday, Goldman said.

Deep Dive: These 16 stocks in the S&P 500 fell at least 25% on Monday as the coronavirus panic intensified

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U.S. stocks suffered their worst session of the coronavirus crisis Monday, with scores of companies posting double-digit percentage declines.

The Dow Jones Industrial Average DJIA, -12.93%  fell 2,997 points, or 12.9%, to close at 20,188.52. It was the Dow’s third consecutive session ending with an increase or decrease of 9% or more — the longest such streak since October 1929.

The Federal Open Market Committee on Sunday cut the federal funds target rate by 1% to a range of zero to 0.25%, jumping ahead of its regularly scheduled meeting that was set to begin Tuesday but was canceled.

The S&P 500 Index SPX, -11.98%  tumbled 12%, with 491 stocks showing declines. Here’s a breakdown of the day’s 356 double-digit declines among components of the benchmark index:

Decline range on March 16 Number of S&P 500 stocks
10% or more 356
15% or more 189
20% or more 64
25% or more 16
30% or more 3
Source: FactSet

For the Dow and the S&P 500, Monday marked the third-worst trading session ever. The Nasdaq Composite Index COMP, -12.32%  ended the day with a loss of 12.3%, its worst-ever one-day decline.

President Trump said Americans should avoid gathering in groups of 10 or more and keep their children at home. That came after schools across the country were closed, all major sports leagues were suspended, and local governments took many other actions to keep crowds from forming.

Goldman Sachs predicted the U.S. economy would shrink during the second quarter and that their forecasts indicated a recession (two quarters of GDP decline) was likely.

Worst of the S&P 500

Shares of energy companies, airlines, cruise lines, and casino and hotel operators have been among the largest decliners during most of the down days since the S&P 500 hit its last closing high Feb. 19. But on Monday, several consumer-discretionary companies, including apparel retailers, were hit very hard.

The following table shows the 16 components of the benchmark index that were down 25% or more Monday. You can scroll the table to see how much these stocks have declined since Feb. 19, how much they are down from their 52-week highs, how much they are down during 2020 and how they performed during 2019. All figures exclude dividends:

Company Ticker Industry Price change – March 16, 2020 Price decline since Feb. 19 Decline from 52-week high Price decline – 2020 Price change – 2019
MGM Resorts International MGM, -33.61% Casinos/Gaming -33.6% -68.1% -70.4% -69.2% 37.1%
Apache Corp. APA, -32.34% Oil & Gas Production -32.4% -80.8% -85.7% -78.7% -2.5%
Capri Holdings Ltd CPRI, -30.65% Apparel/Footwear Retail -30.7% -65.1% -80.7% -74.7% 0.6%
Tapestry Inc. TPR, -29.27% Apparel/Footwear Retail -29.3% -59.1% -68.2% -57.4% -20.1%
Ventas Inc. VTR, -28.59% Real Estate Investment Trusts -28.6% -59.8% -68.4% -58.8% -1.5%
DXC Technology Co. DXC, -28.34% Data Processing Services -28.3% -63.6% -83.8% -71.1% -29.3%
L Brands Inc. LB, -27.73% Apparel/Footwear Retail -27.7% -52.6% -59.9% -35.7% -29.4%
Noble Energy Inc. NBL, -27.26% Oil & Gas Production -27.3% -72.4% -81.6% -78.9% 32.4%
Alliance Data Systems Corp. ADS, -27.07% Data Processing Services -27.1% -64.4% -80.3% -67.8% -25.2%
Discover Financial Services DFS, -26.84% Regional Banks -26.8% -49.9% -59.3% -55.4% 43.8%
Simon Property Group Inc. SPG, -26.71% Real Estate Investment Trusts -26.8% -52.0% -64.7% -55.9% -11.3%
Synchrony Financial SYF, -26.03% Finance/Rental/Leasing -26.0% -46.5% -53.2% -50.4% 53.5%
LyondellBasell Industries NV LYB, -25.49% Chemicals -25.5% -57.4% -64.7% -63.1% 13.6%
Realty Income Corp. O, -24.93% Real Estate Investment Trusts -24.9% -32.2% -36.4% -26.7% 16.8%
Lincoln National Corp. LNC, -24.91% Life/Health Insurance -24.9% -64.4% -67.9% -63.3% 15.0%
Darden Restaurants Inc. DRI, -24.66% Restaurants -24.7% -59.2% -61.7% -54.9% 9.2%
Source: FactSet

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The Fed dropped interest rates to 0% — what that means for your credit cards and bank accounts

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The Federal Reserve’s decision to cut interest rates to zero isn’t good news for savers — or spenders.

The Fed said Sunday that it was cutting its benchmark federal funds rate by 1% to a range of 0% to 0.25%, alongside other measures meant to stimulate the nation’s economy as it takes a major hit from the coronavirus pandemic. The move caused apprehension among investors, with the Dow Jones Industrial Average DJIA, -12.93%  , the S&P 500 Index SPX, -11.98%  and the Nasdaq COMP, -12.32%  all dropping upwards of 8% in trading Monday.

The last time the Federal Reserve did this was back in 2008, when the global economy sank into a major recession. The Fed kept rates that low until 2015.

Rea d more: Fed is ‘throwing money in the wrong place,’ says Sheila Bair, former top banking regulator

Moves like these on the part of the Fed can have a direct impact on people’s financial lives, as banks adjust the interest rates on everything from credits cards to checking accounts to certificates of deposit.

Here’s what you need to know about how the Fed’s rate cut will affect your finances:

Credit-card APRs will go down soon

The annual percentage rate (APR) on credit cards will go down, credit-card experts said, with estimates ranging from a 0.25% decrease to a 1.5% drop.

When cutting APRs, banks won’t just be paying attention to Sunday’s Fed move, but also the rate cut the central bank announced earlier this month, said Matt Schulz, chief industry analyst at CompareCards, a subsidiary of LendingTree TREE, +2.55%  .

“The rates drop because most cards are variable-rate cards, which move up and down with the prime rate, which moves in line with the Fed’s rates,” Schulz said. “In fact, Fed rate changes are one of the few things that can bring about a nearly immediate rate change. For other changes, issuers generally need to give a cardholder 45 days’ notice.”

Unfortunately for consumers, the decline in credit-card rates won’t necessarily help them make ends meet right now. Ted Rossman, industry analyst for, predicted that rates would decrease from their current national average of 17.35% to 16%. “Unfortunately, that won’t save the average credit card borrower very much money,” he said.

For a person who owes the average amount in credit-card debt, which is $5,700, that decrease would amount to a $5 a month savings on the minimum monthly payment. “Making minimum payments towards $5,700 at 16%, you’d be in debt for 23.5 years and would pay $7,060 in interest,” Rossman said. “That’s about $500 less than if the rate were 150 basis points higher, but it’s still a long time and a lot of money.”

‘Checking and savings accounts tend to react less to Fed measures, judging by previous rate hikes or cuts.’

Jill Gonzalez, analyst for WalletHub
Your bank account will accrue less interest

As with credit cards, banks will also decrease the annual percentage yield (APY) on checking and savings accounts in line with the Fed’s move. This is true whether you hold your money with a traditional bank or an online bank that offers a higher APY.

“Checking and savings accounts tend to react less to Fed measures, judging by previous rate hikes or cuts,” said Jill Gonzalez, an analyst for personal-finance website WalletHub. Nevertheless, she estimates that the interest rates on deposit accounts may decrease by an average of 32 basis points.

The good news for savers is that if previous Fed rate cuts are any indication, some banks will still keep on paying some interest to people with checking and savings accounts.

Also see: The Fed cut interest rates to zero, but don’t expect to see 0% mortgages anytime soon

“During the 2008-2015 zero rate days, most online savings account rates remained in a range of 0.70% to 1.00%,” said Ken Tumin, founder of, which is also a subsidiary of LendingTree. “If history repeats, that may be the bottom we can expect from today’s online savings accounts.”

What should people do with their money?

To boost their savings potential given the likelihood of low rates in the future, consumers should look into opening a certificate of deposit, or CD. “Locking in a CD now before the banks make additional rate cuts does make sense,” Tumin said. “That will allow you to earn more interest than by keeping your money in a savings account which has no rate lock.”

Tumin advised that consumers need to act fast to get the best rates, as banks will start slashing interest rates on CDs soon in reaction to the Fed’s moves.

‘Locking in a CD now before the banks make additional rate cuts does make sense. That will allow you to earn more interest than by keeping your money in a savings account which has no rate lock.’

Ken Tumin, founder of

When choosing a CD, consumers should consider a no-penalty CD, he said. Unlike traditional CDs, no-penalty ones don’t charge a fee for early withdrawal. That could prove useful if someone is concerned about their job security now and needs to ensure access to emergency funds. “The downside is that the no-penalty CD rates are sometimes lower than the online savings account rates,” Tumin said.

On the credit-card front, consumers should keep an eye out for 0% APR balance-transfer offers, because that could help them stave off interest costs for the time being. “These are always a great option to save money on interest, and particularly with today’s uncertainty, it makes sense to lock in that low rate for up to 21 months,” Rossman said, though he noted that these offers “could become less generous if banks raise fees/shorten terms to make up for losses elsewhere.”

Consumers who have fallen on hard times because of the coronavirus outbreak should also contact their credit-card issuers to see if they can have any flexibility in terms of monthly payments and APRs.

“Issuers have programs that can help people in times like these by offering breaks like higher credit limits, extended payment deadlines and even short-term APR reductions,” Schulz said.

Mark Hulbert: Stocks aren’t bargains yet, but a buying opportunity will come. Here’s how you’ll know it’s here

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Are stock prices now attractive enough to provide a safety net under this plunging market?I know it seems strange to be asking this question. Prior to February the debate among analysts was between those who thought the market was merely overvalued and those who considered it to be extremely overvalued.

Such concerns are so last month. The question for today is whether the market’s plunge, which has reduced the S&P 500 SPX, -11.98%  by as much as 30%, has not only worked off the market’s overvaluation but perhaps even made equities undervalued.

Unfortunately, we’re not there yet. But the valuation picture is a lot better than it was a month ago. Before presenting the data, I should acknowledge — as I and others have on numerous prior occasions — that valuations are not particularly helpful as short-term market timing tools. The stock market can stay undervalued for a long time before bottoming, just as it can stay overvalued for a long time before topping out (as the last several years have so amply illustrated).

When valuations become attractive enough, courageous contrarian-minded investors will step up to the plate and start buying

Still, when valuations become attractive enough, courageous contrarian-minded investors will step up to the plate and start buying — thereby cushioning the havoc wreaked by the panic selling.

When will that point be reached? First, consider another qualification about valuations in today’s market: Many of the variables on which some valuation metrics are based are shifting so fast, in unknowable ways, that little confidence can be placed in them. Take the P/E ratio, for example: There’s no way of coming up with even a reasonable guesstimate of the impact the coronavirus pandemic will have on corporate earnings. But if earnings fall just as fast as the market, the P/E will remain unchanged.

Fortunately, there are a handful of valuation ratios in which the denominator changes relatively slowly over time, enabling us with some confidence to know where they stand now. An example is the q-ratio, which was introduced by the late James Tobin, the 1981 Nobel laureate in economics. It is calculated by dividing market value by the replacement cost of assets. That cost should be more or less the same today as it was in February.

The same is true for the other three valuation ratios on which I am focusing in this column: The price/book ratio (book value changes relatively slowly), the cyclically adjusted price/earnings ratio (based on the average of 10-year inflation-adjusted earnings per share, which also changes slowly), and the Buffett Indicator (the ratio of GDP to the total value of all stocks; GDP is a lot less volatile than the stock market).

Projected 10-year returns are markedly better than they were at the February top.

To calculate how much less bearish (i.e., more bullish) these four indicators are today, relative to where they stood at the market’s Feb. 19 bull-market peak, I constructed for each an econometric model that most closely fits the relationship between its historical readings and the S&P 500’s subsequent 10-year inflation-adjusted return. I then fed into that model the indicator’s Feb. 19 reading and compared it to its current projection.

The results appear in the chart below. Notice in all four cases that the projected 10-year returns are markedly better than they were at the February top. On average, the four models are projecting a 1.0% annualized return over inflation over the next decade. Add in dividends, and you get an average projected return of around 3% annualized.

That’s significantly higher than the comparable projections for the 10-year Treasury TMUBMUSD10Y, -23.19%   (which are for a loss of 0.6% annualized, based on the Cleveland Fed’s calculation of expected inflation over the next decade).

That’s the good news. Unfortunately, these projected real returns over the next decade are still less than half the 6.8% annualized return the stock market has produced over the last two centuries. So it’s not clear that contrarians are ready to buy equities in a big way.

Still a projected annual return that is even modestly positive is a lot better than what fundamental analysts were projecting just a few weeks ago.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at

Read: This bear market in stocks is only two steps away from turning into a monster

More: Goldman says U.S. growth will shrink 5% next quarter and here’s how low stocks could go

The Margin: A rare win for Gen X? Boomers gave us latchkey childhoods that prepped us for coronavirus quarantine

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Is Generation X — the legion of latchkey kids for whom the waning Cold War still forced futile school drills — better able to self-soothe under the confines of a coronavirus quarantine than Gen Z, millennials and baby boomers?

Such a theory found social-media traction over recent days, with many posters in their late 30s to early 50s recalling hours in basements or bedrooms: hours with books and board games, movies and music and, yes, joysticks, before good parenting was measured by how crammed the extracurricular calender is. #GenX went outside, too; they just weren’t scheduled to.

For sure it’s Gen X–ers and young boomers who grew up to become those helicopter parents. For them it’s the inherent cynicism of glossed-over autonomy, shrinking reliance on democratic institutions such as schools or places of worship, or perhaps the sometimes-necessary chaos of divorce that gave way to being a different kind of parent than their own. For many, though, as they dig in at home and limit their outside interaction right now because of COVID-19, they’re telling themselves they’ve been here before.

All generations are reacting in their own way to the public health crisis as restaurants and bars in major cities were ordered shut, gyms powered down, school districts and universities went on hiatus, and some corporate offices allowed their ranks to work from home.

When self-quarantine can’t be maintained, social distancing in public is seen as the broadest and potentially most effective defense right now. Among other things, it champions keeping at least 6 feet between people. Large, even medium-sized gatheringsare now to be avoided, and that means birthday parties and weddings are being postponed. Pop-up anything is over as we know it for now. All that harkens back to a few decades ago when meet-ups and hookups took more coordination than just a text (sometimes long enough to change minds).

Read: As troubling images of party scenes spread across the internet, health-care leaders jump on #StayAtHome trend

Arguably, baby boomers and their free-range, pre-technology childhoods are even better resourced when it comes to making do with less structure.

But here’s the issue, say Gen X–ers social shaming their own families: Adult kids are having trouble convincing boomers and Silent Generation grandparents to heed the public health measures of isolation. Americans have been digging in on personal liberty versus public good for a long time, and change doesn’t come easy. “#GenX, we are going to have to get real comfortable with grounding our parents,” said one tweet.

Read: An argument for a full lockdown to fight the coronavirus comes down to simple math

Its role as sandwich filling between two major, influential generations arguably leaves a reflective Gen X best positioned to react to this calamity: news-consuming and social-media-savvy in a way that honors the gravity, self-reliant enough to cook and tackle big cleaning projects, to create and write and read and stream diversion after diversion. And, patient enough to, sometimes,wait and see what’s next.

How long will coronavirus last? It depends — but ‘prepare yourself for a long ride’

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The reality of the global COVID-19 pandemic in America has started to set in: The U.S. woke up on Monday to the news of soaring numbers of cases, with 3,813 people infected and at least 69 deaths. An avalanche of school closures, remote-work mandates, large-event cancellations, and travel disruptions have ground normal life to a halt. Some people have lost jobs or seen business suffer. Many are stockpiling emergency supplies and finally learning how to wash their hands properly.

As the deadly coronavirus threatens to upend economic, professional and personal lives, one big question weighs on everyone’s mind: How long will this last?

That will depend on several variables, according to public health experts, some of which remain unknown. For instance, scientists still don’t know whether warm weather will suppress the virus, as it does the seasonal flu, said Jeremy Konyndyk, a senior policy fellow at the Center for Global Development think tank and former USAID official in the Obama administration, told MarketWatch.

Experts also don’t know whether COVID-19 will become a seasonal bug akin to influenza, or whether it might return in the fall in a mutated form, said Joshua Epstein, a professor of epidemiology at the NYU School of Global Public Health. Even after a vaccine is developed, he added, some Americans are likely to refuse it.

One thing seems clear: “The length of time that this is with us is really a function of how good a job we do right now of limiting the spread,” Konyndyk told MarketWatch.

To that end, the CDC has urged “social distancing” — that is, steering clear of mass gatherings and staying about six feet away from other people when possible — to help slow the transmission of COVID-19, the disease caused by the novel coronavirus. And, counterintuitively, a longer period of precautions like social distancing could mean better outcomes in the long run, experts say.

‘Flattening the curve,’ in other words, both delays and reduces the peak of the outbreak — slowing the rate at which a disease moves through a population so that the health-care system is better equipped to handle it.

Take the widely circulated adaptations of a CDC chart showing an epidemic’s number of cases over time: One steep-peaked curve, showing the number of cases without protective measures in place, far overwhelms health-care system capacity. A broader, flatter curve with interventions in place runs for a greater time span, but remains within hospitals’ and the health-care infrastructure’s capacity.


“Flattening the curve,” in other words, both delays and reduces the peak of the outbreak — slowing the rate at which a disease moves through a population so that the health-care system is better equipped to handle it. “Ironically, part of success here is ensuring that this lasts a lot longer than it otherwise might,” Konyndyk said.

Social distancing can take an economic and psychological toll. But in the end, “if you feel like this was all for nothing, then you’ve done it right,” said epidemiologist Emily Landon, the medical director for infection prevention and control at University of Chicago Medicine.

In an ideal scenario, most people who took precautions against the pandemic will feel like it was ‘a big nothingburger.’

“If we spread this out over longer periods of time, then people will feel like, ‘Well, it wasn’t that bad — only one person I knew was in the hospital at a time, and I stayed home but nothing horrible ever happened,’” Landon said. Ideally, she added, most people who took precautions against the pandemic will feel like it was “a big nothingburger.”

In a worst-case scenario, the disease could infect 160 million to 214 million people in various U.S. communities over the course of months or a year, with up to 200,000 to 1.7 million potential fatalities and between 2.4 million and 21 million hospitalizations, according to projections by CDC officials and epidemic experts reported by the New York Times. But those figures don’t take into account the present actions aimed at slowing the disease’s spread, such as social distancing, virus testing and contact-tracing, the report said.

Experts who spoke to MarketWatch hesitated to predict the “end” of the coronavirus given the number of unknowns, but they had some ideas of how coming weeks and months might play out.

“If we really do a good job with social distancing, and we see the expected impact on the number of new cases, I think that could in turn allow us to begin to ease up,” said Jessica Justman, an infectious-disease expert at Columbia University’s Mailman School of Public Health. If Americans don’t do a good job with social distancing or it doesn’t work as well as expected, the measures would need to be prolonged, she said.

‘Life in the country is going to be different for the next few months — how different and how long is hard to say.’

Jeremy Konyndyk, a senior policy fellow at the Center for Global Development

In a best-case scenario, steps like social distancing could suppress COVID-19 transmission, Epstein said, though that would depend heavily on people’s behavior. Late spring would roll around, with “possible responses of the virus to warmer weather” and people spending time outside rather than cooped up in close quarters.

Konyndyk said he wasn’t sure how long social-distancing measures in the U.S. would be in effect, but recommended that people mentally prepare. “Life in the country is going to be different for the next few months — how different and how long is hard to say,” he said. “I don’t know how long, but prepare yourself for a long ride.” Epstein echoed that sentiment: “Get ready to hunker down.”

Konyndyk looked to China, where the virus originated in December but has recently slowed its spread, as a reference point. Despite an initial response that many criticized as slow, the Chinese government implemented aggressive measures to get the outbreak under control, including mandatory quarantine, newly built hospitals and widespread cancellations of public gatherings. China’s number of new COVID-19 cases has dropped substantially over time.

But “the measures that China imposed are so extraordinarily draconian and executed with such a high level of discipline that it will be hard for other places to replicate that, including the U.S.,” Konyndyk said.

Singapore, a nation much smaller than the U.S., was able to act in a swift, targeted manner to contain its number of coronavirus cases, he added. “They started at a time when cases were very few,” he said.

The experts stressed the importance of accelerating coronavirus testing in the U.S., the speed of which members of both parties have criticized. “Keeping track of the number of new cases every day is going to be our most important indicator of how we’re doing,” Justman said. “We have to have proper testing capacities.”

There is also the possibility of a resurgence or second wave of cases after the disease seems to drop off. “The crucial thing is, if it’s not gone and you send everybody back to school and it’s floating around, you’ll have the same thing again,” Epstein said.

Landon said a vaccine would vastly improve the situation, “but that’s a long way away.” Several drug makers and startups, including Gilead Sciences Inc. GILD, -2.61%  , Inovio Pharmaceuticals Inc. INO, -14.86%   and Johnson & Johnson JNJ, -5.33%  , are working to develop treatments or vaccines. A clinical trial on a potential vaccine started Monday, the Associated Press reported, but it can take 12 to 18 months to fully develop a vaccine.

“Hopefully we’ll get through the worst of it, and then there will be slow spread, and we’ll get to start returning to some things,” Landon said. “But this is going to be really hard.”