Daily Markets: Despite Earnings, Investors Remain Focused on Spread of Coronavirus

Daily Markets: Despite Earnings, Investors Remain Focused on Spread of Coronavirus

Despite the accelerating velocity for the current earnings season, markets remain focused on the rapidly spreading coronavirus which has surpassed 4,500 cases in China and led China to restrict travel to Hong Kong as the death toll tops 100. Some 60 million are under travel restrictions in China, and select countries, including Indonesia and the Philippines, have restricted Chinese tourists. Outside of China, there are more than 60 confirmed cases, including ones in the US, Australia, France, and Germany. The US Centers for Disease Control and Prevention raised its travel precautions for China to its highest level, and at last count it is monitoring 110 possible coronavirus cases across 26 states.ADVERTISING

The escalation weighed on equity markets yesterday, leading the Dow Jones Industrial Average to fall 1.6%, its biggest one-day drop since October. The S&P 500 fell 1.6% as well extending its 2-day decline to 2.5% and the Nasdaq Composite dropped 1.9%, its worst day since August. As of yesterday’s close the Dow, NYSE Composite and the Russell 2000 were all in negative territory for the year. Year to date, at up 2.5% as of last night’s close, the Nasdaq 100 is the strongest performer of the major domestic equity indices, the Nasdaq Composite was up 1.9% and the S&P 500 up 0.4%. The CBOE S&P 500 Volatility Index rose over 25% yesterday and is now up 32.3% year-to-date.

As reports indicate the coronavirus continues to spread…

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About the Author

Lenore Hawkins & Chris Versace
Lenore Hawkins serves as the Chief Macro Strategist for Tematica Research. With over 20 years of experience in finance, strategic planning, risk management, asset valuation and operations optimization, her focus is primarily on macroeconomic influences and identification of those long-term themes that create investing headwinds or tailwinds. Chris Versace is Tematica's Chief Investment Officer and editor of Tematica Investing newsletter. All of that capitalizes on his near 20 years in the investment industry, nearly all of it breaking down industries and recommending stocks.

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