Market Recap – Coronavirus

The virus that was first spotted in the Chinese city of Wuhan, managed to frighten financial market participants. The virus is one of seven known coronaviruses that affect humans. Four are causing the common cold, the fifth is SARS that broke out in 2002, the sixth is MERS broke out in 2012. This is the seventh. The World Health Organization has not given it a name and believes that it can be contained. SARS killed almost 800 people, caused  macroeconomic readings to drop (halving the Chinese retail sales), but the impact was brief as economic data bounced back quickly. Restricting the natural human transportation is huge, but a cynical would realize that 1000 people per year are being killed from crocodiles, and 10000 people per year are being killed from tsetse flies attacks.

Traders would now need to turn their focus to Wednesday’s FOMC meeting. Option pricing is currently giving 87.3% chances of no monetary policy change.

Boris Johnson, the UK Prime minister, hinted that he would move forward with the 5G mobile network of Huawei, against the US objections.

Macro releases & Earnings: The Japanese inflation reading increased to 0.3% y/y adding to the positive macro releases momentum. Today’s economic calendar includes the US durable goods orders and the US consumer confidence. Both numbers are expected to increase. Alibaba, Apple, eBay, Tesla, Visa, Pfizer are releasing their earnings.


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