Timeline of Concern

US equity markets have had their worst week since 2008. The S&P500 has tumbled 13% since its peak on the 19th February, a mere 7 trading days ago. The sell-off was broad-based with no sectors spared.

The market impact of the CoronaVirus, or COVID-19, began as it spread outside of China. The US market started to fall when South Korea, a major cog in the global supply chain, and then Italy, reported cases and the infection rate gained momentum. Major US companies such as Apple and Microsoft with exposures to China then started to report that their revenues would be negatively affected even as the rate of infection in China began to slow.

Up to now, the US has been relatively free of the virus. However, the penny dropped last Wednesday night as an infected patient was detected in California where the source of the infection was not known. This is called a community spread. The impact of the news was compounded by a top CDC official stating that she expected to see community spread in the US, as well as the Governor of California informing that the state was monitoring 8,400 people who had arrived from Asia on commercial flights. California had 28 confirmed cases, half of whom were on board the Diamond Princess Cruise ship. On Friday, the WHO raised their risk assessment of the COVID-19 to “very high” as the number of infected countries spread to 49. In all, the US has 71 confirmed cases and has just announced the first death on Sunday….

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