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The spread of the Coronavirus appears likely to get worse in the U.S. before it gets better. The real economic impact on the U.S. economy may be significant as activity in multiple countries around the world slows to a near stop. The process of restarting those economies after the Coronavirus threat has passed will take time. It remains to be seen if this will push the U.S. economy into recession. This matters greatly as it makes the difference between a relatively quick recovery verses a drawn out recovery.
The asset selloff during the last week was wide ranging and swift. Equities were hit hard along with virtually all other assets. The price action was unusual as bonds sold off while market participant concern appeared to switch from decreasing interest rates to the possibility of defaults in bond portfolios. Additionally, traditionally safe assets such as gold sold off along with virtually all other assets. It was as if market participants were only interested in moving to cash.
The coming week is a significant data release week. Expect continued volatility on Coronavirus news.
Hang in there!
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