Global stock markets experienced a downward trend on Wednesday due to increasing concerns over the coronavirus outbreak.
For detailed coverage, check these sources: WSJ,
Reuters,
BBC,
MW,
NY Times,
Bloomberg,
Mstar,
Richmond Fed,
MW
The impact of recent events has been notable. Heightened fears regarding the coronavirus have led to a substantial decline of 3.35% in the U.S. stock market (S&P 500). This drop stands as a stark reminder that optimism alone cannot dictate market dynamics. However, as we reflect on this downturn, it is crucial to assess where we currently stand in the wake of this significant drop.
The economic ramifications of the coronavirus outbreak remain largely uncertain, with many sources highlighting that predictions largely hinge on speculation. Here are some pertinent insights:
WSJ,
MW,
Politico,
CNBC,
NY Times,
Bloomberg,
Guardian,
Dallas Fed,
Chicago Fed
With ongoing uncertainties stemming from concerns about the coronavirus, a risk-averse approach has led to a downturn in global stock markets last week. This selling trend is observable in today’s trading in Asian and European markets, and is expected to influence American shares when trading begins later today. As we await the start of trading in New York, let’s briefly examine how the major asset classes performed during the trading week that concluded on February 21, according to data from various exchange-traded funds.
The number of coronavirus cases worldwide has surpassed 79,000 as outbreaks continue to spread:
CNN,
USA Today,
Reuters,
WSJ,
Bloomberg,
GQ,
The Guardian,
CNBC,
IHS Markit
By Michael J. Graetz and Ian Shapiro
Q&A with co-author (Graetz) via Yale News
Q: Why prioritize economic insecurity over economic inequality?
A: There are several reasons. The first is that economic insecurity is rampant in the United States. About 40% of Americans say they couldn’t cover an unexpected $400 emergency expense with cash or a credit card charge that they could pay off at the end of the month. Unless this insecurity is addressed, our politics will become increasingly ugly. You’ll see increased polarization and anti-immigration sentiment.
Second, as we learned from Daniel Kahneman and Amos Tversky’s critique of conventional economics, the prospect of loss is a more potent political motivator than the prospect of gain. Trump’s slogan “Make America Great Again” was effective because it implies that he would restore something that was taken away. It wasn’t about addressing inequality. He didn’t promise to make people rich or redistribute wealth. In fact, he bragged about his own wealth. Two-thirds of Trump’s primary voters earned above the U.S. median income of $50,000 for a family of four. These are not blue-collar folks, but they fear that they’re losing things. They’re worried about downward mobility — that their kids will be less successful than they are.
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The demand for U.S. Treasuries continues to demonstrate a flight to safety amidst the turmoil. While the rapid rise of the U.S. stock market may dominate headlines, the flow into Treasuries has remained consistent this year, subsequently driving bond prices up and yields down.
Areas in South Korea are reporting a surge in coronavirus cases: Time.
Are rising dollar values creating challenges for U.S. stocks? MW.
The Eurozone continues to face sluggish economic growth, although there is a slight uptick in February: IHS Markit.
The U.S. Leading Economic Index saw a significant increase in January: MW.
Jobless claims are holding steady near post-recession low levels: MW.
The Philadelphia Fed Manufacturing Index has surged in February, indicating a potential end to the U.S. manufacturing recession: CNBC.
The inverted yield curve for the 10-year and 3-month Treasuries has dipped to a 4-month low:
The U.S. economy showed signs of slowing down in the latter half of last year, but early 2020 indicates a moderate rebound. However, preliminary estimates for March point to a potential decrease in momentum. Currently, there is no indication of an imminent recession based on existing data. Nevertheless, revised projections for the upcoming month suggest a stabilization at a modest growth rate rather than a continuation of the previous rebound seen after a more subdued macroeconomic environment in late 2019.
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The recent Democratic debate has seen pointed attacks, particularly aimed at Bloomberg: Reuters.
China’s manufacturing sector continues to struggle as a result of the virus outbreak: SCMP.
The White House has acknowledged that current trade policies have contributed to a slowdown in the U.S. economy: Bloomberg.
Fed meeting minutes suggest interest rates are likely to remain stable in the near future: CNBC.
Gold prices have risen to a seven-year high amid concerns that the virus may impact global growth: Bloomberg.
Is the bullish U.S. stock market overlooking potential risks associated with the coronavirus? CNBC.
The recent rebound in UK retail sales suggests a stronger first quarter after a weak finish to the year: MNI.
Consumer confidence in Germany is expected to slightly decrease in March: RTT.
The IMF Managing Director expresses cautious optimism regarding the global economic landscape: IMF.
Wholesale inflation in the U.S. saw a sharp increase in January, although it may be a temporary spike: MW.
U.S. housing starts have declined in January but remain near a post-recession high:
In this restructured content, the articles reflect on the economic impacts of the coronavirus outbreak, stock market performance, and relevant economic indicators. The provided links to sources offer readers a chance for further exploration. Thank you for your consideration!
