Unpacking Wall Street's Worst Week Since the Financial Crisis

The coronavirus outbreak is nearing pandemic status

There's only so many ways to describe the bloodbath that occurred on Wall Street this week. The coronavirus outbreak, nearing pandemic status, sent the Dow, S&P 500, and Nasdaq all into correction territory and headed for their worst weekly losses since October 2008. The Dow twice logged single-day losses of 1,000 points or more,while the 10-year treasury bond yield plummeted to record lows. As U.S. equities continue to free fall, and the Trump administration is unable to quell investor panic, Wall Street's "fear gauge," the Cboe Volatility Index (VIX) roared to its best week ever.

COVID-19 Panic Hits Fever Pitch

The coronavirus impacted virtually every sector this week; few were spared. Microsoft (MSFT) warned that its Windows unit guidance for the third quarter would be impacted by COVID-19. Companies like Papa John's (PZZA) scored earnings beats, but the outbreak still weighed on the restaurant stock's outlook. Travel stock Expedia (EXPE) felt the virus headwinds exacerbated by job cuts.

There were some stocks that benefited from the sell-off. Drug stock Moderna (MRNA) broke out after its experimental COVID-19 vaccine was shipped to the U.S. for testing. Similarly, options traders jumped on Gilead Sciences (GILD) for its role in a potential treatment, while Alpha Pro Tech (APT) hit a new high on face mask demand. Later in the week, Novavax (NVAX) broke out after a positive vaccine development.

Taking a much-needed reprieve from all things coronavirus, Walt Disney (DIS) and Mastercard (MA) endured C-suite shakeups, Beyond Meat (BYND) has a new rival, and options traders blasted the two ride-sharing apps.

New Week, New Month, and A Copper Theory to Watch

March kicks off next week, and there's retail earnings and jobs data on tap. As you sift through the avalanche of think-pieces trying to unpack this week's sell-off, there's an overlooked theory to consider; Dr. Copper. In the meantime, these VIX levels were in focus prior to this week, offering up some clarity behind Wall Street's disastrous collapse.