Coronavirus Impact to the Markets Not Yet Certain
Each day we hear something related to the Coronavirus. One day it is doom and gloom and a global pandemic is certain. The next it is controlled and cure is found and the spread has stopped. We see market reactions all over the board. In some cases I have seen what I would call bad news and the market charges upward - irrational.
The bottomline is that the world is impacted negatively because China represents 19.72% of the global GDP! If the is the case and China is operating at 50% (probably less) should we can expect a pullback in the markets of five to ten percent? I think so! My personal prediction is the market flip-flop action we have been experiencing will continue until April. I would expect by April we will know if the virus is subsiding or is a global pandemic. Right now we should all brace for volatility.
Since we started this blog about four years ago that seem to be the only sure thing over time - volatility action. CNBC reported that car sales for February in China we down 91%. IHS Markit, a data firm, reported that the U.S. composite output index fell to 49.6 in February, down from 53.3 in January, and the lowest level since October 2013. A level below 50 indicates contraction, while a level above 50 signals expansion.