Wall Street heads for its worst first quarter ever

US stocks opened sharply lower on Tuesday, with the Dow Jones Industrial Average down over 200 points. The S&P 500 and the Nasdaq Composite were down around one percent during early trading.

Investors remain focused on the worsening Covid-19 outbreak in the US, which officially has become the most affected country, with confirmed cases rising to more than 164,000. President Donald Trump said on Sunday he hopes the country will “be well on our way to recovery” by June 1.

US stock markets are giving back some of the gains from the previous session, when the Dow jumped nearly 700 points and the S&P 500 rallied 3.4 percent. The gains on Monday were led by an eight percent surge in Johnson & Johnson shares after the pharmaceutical firm announced a vaccine candidate for the coronavirus.

“I think the market has established some type of bottom,” Tom Lee, head of research at Fundstrat Global Advisors, told CNBC. “I don’t know if this is October ’08 here; we still have some wood to chop.”

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The Dow is now up 20 percent from its coronavirus sell-off low on March 23, while the S&P 500 has grown more than 17 percent from those levels.

Despite the recent comeback, Wall Street is headed for its worst start from the beginning of the year. US stock markets are down 21.8 percent since January 1, on track for the worst quarter since 1987 and the worst first quarter ever.

The Dow is down 12 percent in March, on pace for its worst month since October 2008. The S&P 500 is down 11 percent this month, also on pace for its worst month since 2008. It is on track for its worst quarter since 2008 and the worst first quarter since 1938.

Goldman Sachs has significantly downgraded its outlook for the US economy between April and June. The investment bank now expects an annualized rate of contraction of 34 percent compared to the previous quarter. Its last estimate was an already-shocking 24 percent.

Goldman has also revised the unemployment rate, projecting it to rise to 15 percent by the middle of the year, compared to nine percent earlier.

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