Market Summary: The long and the short of it.
The World Health Organization (WHO) declared the Wuhan coronavirus a “public health emergency of international concern.”
The markets took this news as good-bad news. The stock markets, which tumbled on Thursday due to the rising death toll in the world’s second-biggest economy, steadied slightly on Thursday after the WHO praised China’s efforts to contain the virus.
Americas
North and South American markets finished mixed as of the most recent closing prices. The S&P 500 gained +0.31% and the Brazilian Bovespa rose +0.12% and Mexico’s IPC lost 0.60%
Asia
Asian markets have had a little more time overnight to digest the “good-bad news”. Asian markets are mixed on Friday. The Japanese Nikkei 225 is up +1.20% while the Hong Kong Hang Seng gained +0.32%. The Shanghai Composite remains closed for the extended lunar new year. Although Chinese stock markets continue to be closed, the China A50 futures tumbled back to recent lows today, the lowest close since June. The anxiety was also reflected in China’s Large-Cap ETF (FXI) traded on the New York exchange, down almost -9.00% from the January 14 high, back to the lows of June.
Europe
On Thursday European markets finished sharply lower, with shares in Germany leading the region. The DAX was down -1.41% while France’s CAC 40 was off -1.40% and London’s FTSE 100 dropped -1.36%.
U.S. Treasuries also applauded the “good bad news”, the 10- year note finished at 1.56. However, copper extended its recent plunge with a -1% decline, while Crude oil (WTI) fell below $53 a barrel for the first time since Oct. 15. Gold held steady at $1,575 an ounce, Silver finished at $17.94 an ounce while Bitcoin posted in at $9,499. The fear index (VIX) was beaten down to 15.76.
Cognitive Eyeballing
We are witnessing an extremely stubborn decade-long bull market and the very powerful force of the herd on the move. The perspective and assessment of the horizon (“cognitive eyeballing”) is distorted. Investors no longer seem to be able to properly assess the risks ahead and have become insensitive to them. However, these risks are real, the market risks alone are unprecedented, geopolitical risks, sanctions, embargoes, trade wars, potential kinetic wars. Throw in a little “public health emergency of international concern” and only the gods know where this all leads.
We at the Impartial Lens believe every prudent investor should be having a good look at the assets they hold and ask themselves… Are the reasons I bought the asset still valid?