Switzer on Saturday

Let’s hope this virus doesn’t go viral

Founder and Publisher of the Switzer Report
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Friday Close
Change
Change %
Week Change %
Dow Jones
28,256.03
-603.41
-2.09%
-2.53%
S&P 500
3,225.52
-58.14
-1.77
-2.12%
NASDAQ
9,150.94
-148.00
-1.59%
-1.76%
ASX 200
7,017.20
8.80
0.13%
-1.03%
Data for week commencing 27 January 2020

Wall Street has taken the Coronavirus more seriously overnight. A couple of hours before the close, the Dow Jones Index was down over 500 points (or close to 1.8%). It has surprised me how relaxed the big players on US stock markets have been this week, with bond prices rising and yields falling, such that the three month to 10-year yield curve actually inverted in the US on Friday!

As I’ve said before, this can be an early sign that a recession could be on the way. Sure, it’s not 100% reliable as a future indicator but it does underline just how significant this could be for individual stocks in travel-related businesses, retail dependent on Asian customers and miners supplying the Chinese industrial sector.