EDITOR'S NOTE
It wasn't a day to buy the dip.
The Dow Jones Industrial Average's 1,000-point drop Monday was followed by a steep fall Tuesday as the toll of the coronavirus outbreak grows. "Prepare in the expectation that this could be bad," a top Centers for Disease Control official warned.
The yield on the 10-year Treasury declined to its lowest level ever as investors fled to the safety of government bonds. Bond yields fall when prices rise, and Tuesday's move reflects increasing uncertainly over what could be a pandemic. The yield on the 30-year Treasury also dropped to a new bottom.
The record-low yields highlight investors' sentiments that global economic growth will be hard-hit by the virus. The falling rates, it would seem, could pressure the Federal Reserve to lower its key interest rate, but CNBC's Jeff Cox writes that such a response isn't likely.
Earlier this month, the market had been hitting new highs, but now the investing world is a more unpredictable place. Still, Mohamed El-Erian, chief economic advisor at Allianz, made one of the sharpest calls of the day on CNBC's "Squawk Box" before the market turned south. "I understand the inclination to buy on the dip," he said, "but I stress, this is different."
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