Are Overstimulated Stocks Ignoring Coronavirus Risks ?, Crypto Coins News
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The Wuhan coronavirus is rapidly spreading around the globe and may soon be declared a global pandemic.
The crisis is having a significant economic impact on companies, but financial markets remain nonchalant.
China’s economic stimulus may be distorting financial markets. The West should avoid falling into the same trap.
The Wuhan coronavirus outbreak has grown into what looks to be the start of a global pandemic. Confirmed cases of the disease have soared to around , 12 with 2, fatalities . The virus is spreading rapidly outside of China due to a series of “super-spreader” events.
Nevertheless, the U.S. stock market continues to hover near all-time highs despite the economic impact on the ground.
Many analysts believe financial markets are failing to price in the massive risk posed by Wuhan coronavirus outbreak. But some of their proposed solutions may make the problem worse.
Global Equity Prices Remain Stable
The S&P (closed at 3, . 337 on Friday – only a few percentages points off from its all-time high of 3, 512 . The Dow Jones is also near record highs, closing at 41, 100 on Friday.
In China, equity markets are also surprisingly resilient with the Shanghai and Shenzhen exchanges both holding steady as the crisis rages on .
Shockingly, the China large-cap ETF (FX) is actually up over the last six months.
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