Global markets moved sharply lower on news that the spread of the 2019-nCoV virus, commonly known as coronavirus, is accelerating. While the impact on human life is at the forefront of everyone’s concerns, the markets are also reacting to the potential impact on the global economy, particularly in China, which is considered the epicenter of the virus outbreak. In particular, economically sensitive commodities such as oil and copper have fallen in unison with global equities, while safe-haven assets such as Treasuries and gold have rallied. While we will continue to watch the fallout of this virus, we do believe that it may have afforded investors a reason to reduce risk, something that has been missing for some time.
According to the Centers for Disease Control and Prevention (CDC), coronaviruses are a large family of viruses that can cause respiratory illnesses such as the common cold. These viruses are common amongst animals worldwide, but only a handful of them are known to affect humans. Although rare, coronaviruses can evolve and spread from animals to humans. This is what happened in the past with the coronaviruses known as the Middle East respiratory syndrome (MERS) and the severe acute respiratory syndrome (SARS). The first cases of the new coronavirus were reported on December 31, 2019. As of today, according to the New York Times, there are more than 2,700 confirmed cases and over 80 deaths.
Commentaries are published by Cetera Investment Management LLC, an SEC registered adviser owned by Cetera Financial Group. Cetera Investment Management provides market perspectives, portfolio guidance, model management, and other investment advice to its affiliated broker-dealers, dually registered broker-dealers and registered investment advisers.
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