Coronavirus: The Potential Impact on the Global Economy and the MarketsSubmitted by Bond & Devick Wealth Partners on January 29th, 2020
There is a lot of news flow right now, with the tragic helicopter crash that killed Kobe Bryant, his daughter and several other people, the Trump Impeachment and the Coronavirus. The stock market has continued to downplay the impeachment process, and this will probably be a non-event for the markets, unless it leads to the removal of the President from office (which seems unlikely with the Republican majority in the Senate).
The stock market, however, has taken notice of the Coronavirus and according to Bloomberg News, last Monday witnessed the worst day for the global stock market since August of last year as the MSCI All World Index lost 1.62% in value. The worry is that the virus could spread across the globe, causing a large outbreak, inflicting severe loss of life and a dramatic decline in economic output thus plunging the global economy into a world-wide recession.
This was also the fear that drove stock markets down during the SARS epidemic in 2003-2004 and more recently, the outbreak of the Ebola virus in West Africa in 2014. The actions of the Chinese and global healthcare leaders around the outbreak of the Coronavirus were swift and much more coordinated than in the past. This gives us hope that the virus will be contained and the number of people who die and the impact on the economy will be much less than feared.
We are watching the spread of the virus closely and we are saddened for those who have lost their lives from the outbreak. Currently, we are not making any adjustments to portfolios other than regular rebalancing.
Please feel welcome to call us with any questions or concerns.
The Bond&Devick Team