One of the biggest issues affecting the markets has been the spread of coronavirus. Volatility has risen over the last few weeks as traders continue to react to the news about the virus, its spread, containment and overall profit warnings due to potential lower economic growth. This week, things took a turn for the worse and sent stocks plunging.
News continues to break daily that the virus is no longer contained to just China. New cases in Europe, South Korea and even the United States sent traders heading for the exits en masse as the outbreak showed signs of becoming a pandemic. Economists were already beginning to worry about the effects of the outbreak on China’s economy. Now those worries have spread to the rest of the world’s economies.
At the same time, a variety of firms started ratcheting down expectations and issuing profit warnings touting the virus as the reason. From poor supply chains to lower sales, the virus is now causing panic among corporations. Naturally, this sent stocks down further.
With coronavirus spreading, even the relatively bullish economic data released over the week could help overturn the market’s losses. All in all, traders’ fears sent the market reeling.
Be sure to check out our previous Wrap here, when the shortened week created plenty of volatility.
