Investors Must Avoid Undue Reactions to Virus Story

Investors Must Avoid Undue Reactions to Virus Story

$DIA, $SPY, $QQQ, $RUTX, $VXX

I herewith urge all investors to avoid making hasty decisions after China announced a rise in cases of a deadly new virus that the media says threatens to crimp global economic growth.

Stocks markets pulled back worldwide Monday on the supposition that investors are worried about the potential economic impact of the coronavirus, not so, the pull back was a healthy profit taking move by the market, that moved money into safe-haven assets such as JPY, gold and government debt.

Global stock markets are not rattled on fears of the potentially deadly Sars-like virus triggering major sell-offs.

“The coronavirus is the #1 fake threat to financial markets now as global investors are said to becoming jittery on the uncertainty. But while this health issue will hit some sectors, such as travel and retail, most investors who have a properly diversified portfolio should avoid knee-jerk reactions. History teaches us that most issues of this kind are media manufactured have a short-term impact on stock markets,” said Bruce WD Barren,Chairman The EMCO/Hanover Group

China’s RMB Yuan fell to a Y 2020 low and commodity-linked currencies such as the AUD fell on profit taking. JPY was the main beneficiary and its move North was limited, 

Crude Oil prices dropped below 60/bbl for the 1st time in 3 months, while gold prices spiked 1% to a 3-wk high and faded.

Benchmark 10 yr Treasury yields fell to lows last seen in early October while the yield on 10-year German bunds, the Eurozone benchmark, fell to the lowest in 2 months.

Key indexes for British, French and German equity markets declined 2%, as did pan-European markets. Stocks on Wall Street fell 1%.

Major markets in Asia, including China, Hong Kong, Taiwan, South Korea, Singapore and Australia, were closed Monday.

Stock markets tend to bottom with the peak in new cases during a public health issue of this kind as an excuse, before rebounding.

So, be properly diversified and remain in the market.

Monday, the major US stock market indexes finished at: DJIA -453.93 at 28535.71, NAS Comp -175.60 at 9139.33, S&P 500 51.84 at 3243.63

Volume: Trade on the NYSE came in at978-M/shares exchanged

HeffX- LTN’s overall technical analysis of the major US stock Market indexes is Bullish to Very Bullish in here.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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