This week, the markets spent most of their time trending lower. The culprit wasn’t bad earnings or poor economic data. In fact, on those fronts, the last trading sessions were spot on. The issue pulling the major indices happened to be the spread of the coronavirus.
Over the last few trading sessions the viral outbreak has quickly turned into an epidemic that isn’t only affecting China. The disease has now spread worldwide and the number of infected, as well as deaths, has jumped dramatically. With efforts to contain the disease seemingly falling flat, traders have continued to worry about the spread of contagion and dwindling economic health. Given that the virus has struck China during its major Lunar New Year holiday season, the results of a prolonged outbreak could hurt China and the global GDP. With that news, traders continued to sell stocks as the outbreak shows no sign of stopping.
Even the Federal Reserve couldn’t save the markets this week. As expected, Powell & Co. kept rates the same and continued with their patient stance in the wake of mixed economic data and low inflation.
As did earnings. With the season continuing, the few trading days saw some big beats and stable guidance figures from leading firms.
However, the coronavirus panic proved too great. And stocks finished for the most part lower.
Be sure to check out our previous Wrap here, when the shortened week proved to be a volatile one.
