The new coronavirus has dominated headlines the last week with increasing cases of infections and deaths.
After the S&P 500 and Nasdaq reached new all-time highs during last week, concern over the severity of the new coronavirus and its potential impact caused a significant sell-off on Friday that has continued this morning.
Friday was supposed to be the start of a week-long holiday in China as they celebrate the Chinese Lunar New Year. The mood however has changed from a celebratory one to one more of panic. In order to limit the spread of the virus, all major celebrations have been cancelled and travel has been limited.
The origin of the outbreak is thought to be at a seafood market in Wuhan in central China and while the majority of cases are in China and some in other Asian countries, cases have been reported as far as the US, Canada, France and Australia. Wuhan has been effectively shut down with no outbound flights or train services.
As of this morning, the number of infected is just under 3’000 and the death toll has risen to 80. Chinese health officials do not believe it is as serious as the previous SARS virus from 2003 and initially tried to downplay it as a crisis. Over the weekend however the severity of the situation has started to emerge with increasing numbers of infections and deaths.
What to look out for the rest of the week
On Wednesday, the US Fed will deliver their interest rate decision with no change expected.
The UK’s interest rate decision is on Thursday with again no change expected, as well as Q4 GDP data for the US.
On Friday morning, China’s manufacturing and services PMI data will be released and later in the day Q4 GDP data for the Eurozone.