Stocks came under selling pressure today, and it appears that the sellers had good reason. First, Apple announced that sales in China are being greatly affected by the coronavirus and store closings. Then Walmart, in its earnings call after their earnings release, also mentioned that issues will continue to develop as the virus continues to spread. As we have mentioned over the past few weeks, global economic activity is certainly going to be affected by the virus (both end markets and supply lines), and we are now beginning to hear from companies about the problems they are seeing.
For the day, the Dow Jones Industrial Average was down 165 points to finish the day at 29,232. The S&P 500 was down 9 points to close at 3,370. Gold was up $19 to trade at $1,605 per ounce, while oil was up $.02 to trade at $52.07 per barrel WTI.
The question now is not if the coronavirus will affect global growth-it will, but how badly will it affect it and just how long will it last? Apple will likely sell those phones once stores are reopened, but just how much damage will be done before that? The bulls are banking on the fact that we will get back to “normal” sooner than later. The bears are seeing this virus situation with more skeptical eyes. We’ll be monitoring the situation.
Have a nice evening everyone.