Wall Street Fears Over Coronavirus Leads DOW to Fastest 10% Correction in History of Stock Market
U.S. Cannabis Stocks Rally Friday to Close Week on High Note, Canadian Pot Stocks Lag Sector
Wall Street had one of its worst weeks since the great recession of 2008 as investors reacted swiftly to global fears surrounding the potential spread of the novel Coronavirus (COVID-19) outbreak. If it’s one thing markets hate, it’s uncertainty.
As medical experts attempt to access the potential future impacts of the Coronavirus, investors fled for safety in hopes of waiting out the carnage from the sidelines. With markets now closed until Monday, investors can relax for a moment and take some time to access the damage inflicted during Wall Street’s record-setting week.
The Dow Jones Industrial Average (^DJI) set a new record for the quickest 10% correction in the history of the stock market. This week, the DOW plummetted as much as 4,311.40 points or -14.87%. After rallying back late in today’s trading session, the DOW officially closed the week down 3,583.05 points or -12.36%. The DOW’s Relative Strength Index (RSI) closed the week with an oversold reading of just 17.26.
The S&P 500 (^GSPC) didn’t fare much better as the index fell by as much as 481.91 points or -14.44% this week. The S&P also bounced back late Friday to close the week down 383.53 points or -11.49%. The S&P also closed the week deeply oversold with an RSI reading of 19.16.
Until this week’s market shakeout, the North American stock market had been on a tear, and a significant correction was inevitable. If it weren’t the Coronavirus outbreak, it would have been some other sort of crisis triggering a selloff. Stock prices across the board have come down sharply to much more reasonable levels, but the market is not out of the woods yet.
More information on the virus and its potential impact on the global supply chain and the economy as a whole is needed before the uncertainty is removed from the situation. Expect to hear from the U.S. Federal Reserve early next week, which could cause a short term rally in deeply oversold equities.
“I hope the Fed gets involved, and I hope they get involved soon,” said President Trump after the market close today. President Trump is reportedly leaning heavily on the Fed to get involved to help inject confidence back into the markets, which could come in the form of a rate cut or simply pumping money into the markets to prop them up.
Cannabis stocks took a beating this week with all three major marijuana indices down double digits. The North American Marijuana Index finished the week down -16.9% weighed down the most by Canadian pot stocks. The Canadian Marijuana Index closed out the week down -18.92%. The United States Marijuana Index was the top performer of the group losing only -15.36% on the week.
On the bright side, shortly before noon today, all three cannabis indices reversed sharply to close out the week on a high note. The U.S. MJ Index closed today up +0.41% while the NA MJ Index and CDN MJ Index closed today’s session down -0.06% and -3.36%, respectively.
Leading the way for U.S. pot stocks today were the following multi-state operators (MSOs):
- Charlottes Web (TSX: CWEB) (OTCQX: CWBHF) | +19.8%
- Curaleaf Holdings (CSE: CURA) (OTCQX: CURLF) | +15.8%
- Plus Products (CSE: PLUS) (OTCQX: PLPRF) (FRA: 0T1) | +11.3%
- TerrAscend (CSE: TER) (OTCQX: TRSSF) (FRA: TED) | +11%
- Liberty Health (CSE: LHS) (OTCQX: LHSIF) (FRA: S6UQ) | +8%
- 1933 Industries (CSE: TGIF) (OTCQX: TGIFF) (FRA: 1QF) | +7.1%
- Planet 13 Holdings (CSE: PLTH) (OTCQX: PLNHF) | +6.3%
- Tidal Royalty (CSE: RLTY.U) (OTCPK: TDRYF) | +5.1%
- Trulieve Cannabis (CSE: TRUL) (OTCQX: TCNNF) | +3.6%
- Green Thumb (CSE: GTII) (OTCQX: GTBIF) (FRA: R9U2) | +1.1%
- Harvest Health (CSE: HARV) (OTCQX: HRVSF) | +1%
North of the border, Canadian cannabis stocks lagged the sector with only a few companies finishing the day in the green. Here’s how the top Canadian licensed producers (LPs) faired today:
- Tetra Bio-Pharma (TSXV: TBP) (OTCQB: TBPMF) (FRA: JAM1) | +15.9%
- Harvest One (TSXV: HVT) (OTCQX: HRVOF) (FRA: 2CN) | +12.5%
- Neptune Wellness (TSX: NEPT) (NASDAQ: NEPT) (FRA: NTU) | +5.3%
- Meta Growth (TSXV: META) (OTCPK: NACNF) (FRA: 1HV) | +4.2%
- Medipharm Labs (TSX: LABS) (OTCQX: MEDIF) (FRA: MLZ) | +1.6%
- Aphria (TSX: APHA) (NYSE: APHA) (FRA: 10E) | +1.5%
- Organigram Holdings (TSX: OGI) (NASDAQ: OGI) (FRA: 0OG) | +0.3%
- Tilray (NASDAQ: TLRY) (FRA: 2HQ) | -0.8%
- Canopy Growth (TSX: WEED) (NYSE: CGC) (FRA: 11L1) | -1.1%
- Supreme Cannabis (TSX: FIRE) (OTCQX: SPRWF) (FRA: 53S1) | -1.6%
- Village Farms (TSX: VFF) (NASDAQ: VFF) (FRA: 02V) | -3.1%
- Canopy Rivers (TSX: RIV) (OTCPK: CNPOF) | -3.2%
- Cronos Group (TSX: CRON) (NASDAQ: CRON) (FRA: 7CI) | -4.3%
- Valens Groworks (TSXV: VLNS) (OTCQX: VGWCF) (FRA: 7LV) | -6.1%
- WeedMD (TSXV: WMD) (OTCQX: WDDMF) (FRA: 4WE) | -6.3%
- HEXO (TSX: HEXO) (NYSE: HEXO) (FRA: 74H) | -6.4%
- CannTrust Holdings (TSX: TRST) (NYSE: CTST) (FRA: C9S) | -7.6%
- Aurora Cannabis (TSX: ACB) (NYSE: ACB) (FRA: 21P) | -7.2%
- Auxly Cannabis (TSXV: XLY) (OTCQX: CBWTF) (FRA: 3KF) | -10.6%
- Green Organic Dutchman (TSX: TGOD) (OTCQX: TGODF) (FRA: O1GA) | -11.2%
- Namaste Technologies (TSXV: N) (OTCQB: NXTTF) (FRA: M5BQ) | -11.7%
Disclosure: The Cannabis Investor holds a position in Liberty Health.