COVID-19 Update: NYSE Trading Floors Re-Open After 2-Month Shutdown
The NYSE has officially re-opened for the first time since March. However, new measures will be implemented to ensure social distancing with an aim of preventing the spread of COVID-19.
Are NYSE Floors Open During COVID-19?
The New York Stock Exchange (NYSE) trading floors were re-opened on May 26, 2020. This comes following two months of closure due to the COVID-19 outbreak. The NYSE was one of many exchanges around the world that were forced to move their operations remotely following lockdown orders.
The exchange first started remote operations on March 23, 2020. According to Stacey Cunningham, President of the NYSE, this decision was also due to two individuals testing positive for the virus. Historically, the exchange has closed during World War 2 and in the aftermath of 9/11, but this marked the first time that the physical floors were shut down in favor of electronic activities.
How Will the NYSE Trading Floor Look During COVID-19?
While the trading floor is re-opening, the outbreak is still ongoing, and thus, operations will be different. Cunningham has stated that safety measures will be put in place, which will limit the possible strain put on the American healthcare system. This means that the traditional system of a clustered trading floor will be changed to something more suitable for current times.
These changes were outlined by Cunningham in a piece for the Wall Street Journal. Primarily, most designated market makers will not return to the floor but will continue to operate remotely. All brokers who do return to the floor will be required to wear masks so as to prevent the spread of the virus.
Also, not all brokers will return to the trading floor. For those who do, designated workspaces will be defined to enable social distancing. Brokers are also not allowed to travel to the exchange using mass transit.
Temperatures of all entrants to the floor will be checked daily, and the floor itself will undergo sanitization. Other spaces in the stock exchange will mostly remain unused, with workers continuing to work from home. These measures are to ensure as much social distancing and hygiene as possible.
The exchange recently held its 2020 Annual Meeting of Stockholders. However, due to the COVID-19 outbreak, it was held remotely rather than in-person. This goes to show the lengths being taken to adjust to the new reality of the virus.
COVID-19 NYSE Impact Compared to Past Epidemics
History has shown that the markets typically respond negatively in times of criticism or epidemic — and the current outbreak is no exception. In March 2020, the Dow Jones saw its largest single-day drop, which had not happened since the 2008 recession when the global economy was in turmoil.
When compared to previous epidemics such as HIV/AIDS in 1981 and Ebola in 2014, a period of decline is recorded in these situations followed by a recovery around the six-month mark. This time around, the stock market has seen a relatively quick recovery, which many agree is largely due to the coronavirus stimulus package. Whether or not the current rate of recovery will maintain into the future, is yet to be seen.
Do you think the measures being taken by the NYSE will be adequate? Can the market recover from such a setback? Let us know your thoughts below.