WEEKEND WRAP: No Panic in Markets As COVID-19 Story Unfolds

In the US, a long weekend offered the opportunity to assess and reassess positions, but, from Friday afternoon through Tuesday morning, nothing substantially changed in the macro picture of global markets.

COVID-19 continues to dominate headlines, though attention has begun to focus on the spread of the virus outside of mainland China. Johns Hopkins, which provides the most unbiased numbers available, shows 898 reported cases worldwide. For perspective, that number compares to 343 reported on February 8, just 10 days prior.

While there are plenty of alarmists touting this infectious variant as the second coming of the Spanish flu, the available evidence purports to something less deadly. While the mortality rate has remained in the neighborhood of 2-3 percent in China, only a handful of deaths (four) have been directly attributable to infection from the coronavirus.

Wall Street appears to share the view that the virus is not a deadly killing machine, having put together a solid week, however, realization of knock-on effects from the mass quarantines in China are beginning to strike home.

It's been about a month now since the outbreak became apparent in China and efforts to stop the spread of information about it turned to efforts to actually contain the virus itself. Mainland factories have been shuttered and many are not soon to open to full capacity just yet. That's causing disruptions in various supply chains, the effects being noted throughout the global marketplace.

Looking forward, stocks, still at or near record prices, are almost certain to come under some pressure in the coming short week.

Oil has rebounded slightly as the world comes to grips with a glut of crude on the market. WTI continues to trade just above $50 per barrel.

The US treasury bond curve remains flat, with the 10-year note closing out the week at 1.59 percent.

There's unlikely to be any more clarity within the next few days or even weeks as the situation involving the virus is still evolving. Investors looking for a reason to exit have a reasonable excuse to do so.


At the Close, Friday, February 14, 2020:
Dow Jones Industrial Average: 29,398.08, -25.22 (-0.09%)
NASDAQ: 9,731.18, +19.21 (+0.20%)
S&P 500: 3,380.16, +6.22 (+0.18%)
NYSE: 14,097.34, -1.66 (-0.01%)

For the Week:
Dow: +295.57 (+1.02%)
NASDAQ: +210.66 (+2.21%)
S&P 500: +52.45 (+1.58%)
NYSE: +165.41 (+1.19%)

Correction: In earlier posts this January, Money Daily had mentioned that Yum Brands owned KFC and Pizza Hut locations through out China. That is incorrect. Yum's China properties were spun off in 2016. We regret being in error.