As the Coronavirus continues to impact the globe, health experts in the U.S. have warned that Americans should expect to see a rise in virus cases here at home. Not since the SARS epidemic in 2003 has humanity seen such widespread illness spanning the globe. From a stock price point of view, SARS shaved 12% off stock prices before markets recovered. For context, the S&P index is down roughly 5% year to date as of this writing. Financial experts at present estimate the impact to Global GDP as a result of the Coronavirus could reach $300 billion by the time first quarter results are reported, roughly mid April. With travel bans and supply chains of goods being disrupted all around world it’s reasonable to expect these estimates are likely to come to pass. So does this mean it’s time to get out of stocks?
Professionally I expect stock prices to remain volatile, likely moving in a sideways direction until world health experts feel confident this virus has been contained. U.S. market fundamentals such as employment, housing, consumer spending etc. continue to show the U.S. economy is in good shape. Personally it’s difficult to have a discussion regarding stock prices while lives are lost as the medical community searches for a cure to this virus. Pray we find the cure more sooner than later for the sake of all humankind. As it pertains to the stock market…stay nimble, be tactical and know what you own.