The markets got hit with a one-two punch. It starts with coronoavirus and ends up with the Russia-Saudi Arabia dispute causing the oil markets to plummet.
In the United States, trading was paused for 15 minutes due to a 7% drop from the start. After that, the market rallied only to give up the ghost, as they say.
At present, the Dow is down over 1,800 while the S&P is off 211.
The S&P is off 18% from high of 3,373. This means we are getting really close entering a bear market. A 20% decline is considered bear market territory.
While the events of late could be considered short-term, the impact is going to extent forward. With supply chain issues, we could see companies without product to sell. This will certainly affect numbers in the next quarter or two.
Another issues is the hysteria over the virus. According to many, we are not even close to the peak impact. The markets are likely going to see another month of uncertainty as the number of people with the virus grows.
This is what Kyle Bass, chief investment officer of Hayman Capital Management had say.
‘If you’re asking for when the financial markets see peak virus, I think it’ll be about a month from now.’
There was a time when 1,000 point days on the Dow was newsworthy. Over the last week, it is the norm. We are seeing major volatility with the VIX hitting 60 earlier this morning. This means we can likely expect a lot of big moves in both directions.
It was an interesting start to the week. Hang on it is going to be a bumpy ride.
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Posted via Steemleo