|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.