ABOVE: Joel Griffith, a research fellow with The Heritage Foundation, appeared on CBN News' Faith Nation to talk about what is happening with the markets. Faith Nation is seen on the CBN News Channel. For a programming schedule, click here.
The Dow Jones Industrial Average sank dramatically Monday, plummeting nearly 3,000 points, a nearly 13 percent plunge, for the worst drop since the 22 percent crash of 1987. The Nasdaq and S&P 500 each plunged roughly 12 percent as well.
For the third time in a week, Wall Street abruptly stopped trading this morning to slow the slide. It comes despite the best efforts of the Federal Reserve to give the economy a shot in the arm.
The coronavirus is hitting the stock market hard as the economy is being undermined by closings across the country from professional sporting events to restaurants and stores.
Stocks also fell sharply around the world Monday as the coronavirus forced huge swaths of the economy to the edge of a standstill, from parked airplanes to the nearly empty restaurant around the corner.
The selling began immediately on Wall Street, sharp enough to trigger a temporary trading halt for the third time in the last two weeks. Oil lost about 6% and has more than halved this year. The world’s brightest spot may have been Japan, where the central bank announced more stimulus for the economy, and stocks still lost 2.5%.
CBN New's Financial Editor Drew Parkhill explained that the economy is feeling the effects of the preventative measures being taken -- not so much from the virus.
"To prevent the spread of the virus, restaurants are being told to close down in some states by governors," Parkhill said. "Those kinds of things are hurting the economy rather than people getting sick and calling out from work. A recession is possible but it is hard to say."
Parkhill added that the stock market futures sold quickly overnight because people believe the situation is worse than it actually is.
"Many people are afraid that they have overreacted. There is some concern that the Fed (Federal Reserve) sees some things that others don't and the situation is worse than everybody else is seeing."
Parkhill says stocks may finally stabilize somewhat, but it's still too soon to know for sure.
"I wouldn't expect it to be a whole lot more but we could go lower than we have already. We could go under 20,000 on the Dow maybe into 18,000, but I doubt we would go much lower than that," he said.
Also, he explained that Americans will overcome this crisis as we have with two World Wars, the Depression, 9/11 and the stock market crash of 1987.
"We will get through this. In the long term, you will see the Dow go much higher - in the short term, it's going to be a bumpy ride," Parkhill concluded.
Dan Celia from Financial Issues Stewardship Ministries offered an explanation as well.
"Let me summarize what is happening in the economy very quickly," Celia said. "We are going through a public health crisis. We are not going through a market crash or an economic crash. When this public health crisis is over and oil is stabilized, markets will recover. This is likely the first time in the history of the Federal Reserve since 1913 that it felt it necessary to intervene in a public health crisis."