Last week, the coronavirus outbreak gained steam and sent the markets plunging. This week continued the trend, with a hefty dose of surging volatility. News continues to be bleak with regards to the spread of the coronavirus. Globally, cases have now hit over 94,000 with the death toll increasing to 3,200. Concerns about a real contraction in the global economy have come to the forefront as data continues to be mixed, and many firms warned about profits/revenues during the week.
However, it wasn’t all just a straight shot lower. Throughout the week, there were many pockets of large price swings higher. This was due to various central bank actions across the globe, including a surprise emergency rate cute from the Federal Reserve as well as additional stimulus measures overseas.
Nonetheless, these moves were short lived as investors continued to rush towards safe-haven assets. On the week, the 10-year and 30-year Treasury bonds hit lows not seen in 150 years’ worth of record-keeping. This implied that investors were pricing in a serious recession on the horizon.
In the end, the coronavirus is quickly becoming a so-called black swan event – an event that sent the markets lower this week with plenty of price swings.
Be sure to check out our previous Wrap here, when the coronavirus first became a pandemic.
