Well, today it finally mattered. We’ve wondered aloud for the past few weeks why stock market participants seemed so sanguine about the coronavirus and its likely effects on global growth. Today, with reports of more outbreaks in other countries, stocks came under heavy selling pressure and erased the gains that we had seen since the beginning of the year. My take is, given all the uncertainties (including political uncertainties) a flat beginning to the year really makes a lot more sense. It almost appeared like traders were blind to realities. Now, this doesn’t mean investors should panic. On the contrary, investors should stick to their game plan. If you are a systematic investor/saver be glad that you get to buy at cheaper prices. If you are in the distribution phase of your life, be glad that you have a well balanced portfolio that is designed to weather intermittent storms such as these. Again, we simply have given back this year’s early gains, and given the circumstances, that seems logical.
As for today, by the close the Dow Jones Industrial Average was down 1,031 points to finish the day at 27,960. The S&P 500 was down 111 points to close at 3,225. Gold was up $13 to trade at $1,662 per ounce, while oil was down $2.02 to trade at $51.36 per barrel WTI.
It’s likely to be a volatile week, with coronavirus headlines dictating the action. Stay tuned, we’ll get you through it all.
Have a nice evening everyone.