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As Seen and Heard on Reuters TV and Bloomberg Radio


Fear in The Air, Coronavirus, Markets

The emerging impact of the Chinese-born Coronavirus has changed the calculus for investors in a rather abrupt fashion. Over the last week volatility has spiked, equities have corrected approximately 5%, and the dollar has risen along with US Treasury prices and gold bullion. The 30-year Treasury bond is now trading at the lowest yield on record. As the Coronavirus shuts down factories and halts air travel, China’s economy appears to be entering an outright recession after years of mid to high single-digit growth. If the SARS epidemic which struck China in 2002 is any guide, economic demand will rebound in the second half of 2020. However, we do not recommend taking out the fine crystal just yet as there exists no clear indication that this virus will impact the human population and economy in a similar fashion. So where do we go from here?