What’s different this week? Why is the market plunging today on coronavirus fears when last week it shook off the news?
Because the last few days have brought news that the coronavirus isn’t limited to China anymore. From Italy comes a report that the Armani fashion show will go virtual since Milan is a hotspot in that country’s coronavirus outbreak. In Iran report of 8 deaths out of 43 reported infections–an 18.6% mortality rate–has led to concerns that the government is deliberately under-reporting the number of cases of the virus. In China with its 76,000 reported cases, the mortality rate is 3.2%. South Korean now has 750 confirmed cases and airlines have halted flights and Samsung and LG are weighing closure of individual factories that are close to Daegu, the epicenter for the virus in that country.
Today as of 2:00 p.m. New York time the Standard & Poor’s 500 was down 3.32%, and the Dow Jones Industrial Average was off 3.36%. The NASDQ Composite with its heavy technology component is down the most among the major U.S. indexes, dropping 3.65%. The Russell 2000 small cap index is down 3.06%.
Oil prices have tumbled on fears that the virus will bring a decline in demand for oil. U.S. benchmark West Texas Intermediate fell 4.29% to $51.09 a barrel. International benchmark Brent crude is lower by 4.41% to $55.92 a barrel.
Copper, an indicator for expectations on global growth, is down 1.43% today.
Safe haven assets are higher with gold ahead 1.53% to $1674 for April delivery on New York’s Comes. Silver is up 1.76% to $18.94 an ounce.
The yield on the 10-year Treasury fell, as prices climbed, to 1.36%, down another 11 basis points. The 2-year Treasury yields 1.25%, down from 1.35% on Friday. The 30-year Treasury bond set a new record low after falling to 1.82%. On Friday the 30-year Treasury yield set a new all-time low at 1.90%.