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How the coronavirus outbreak has delivered a shock to stocks, bonds and other assets in January – MarketWatch, Marketwatch.com

How the coronavirus outbreak has delivered a shock to stocks, bonds and other assets in January – MarketWatch, Marketwatch.com
                                                                                                                                                                                                                                                                                                                                                                                            

A monthlong bout of coronavirus has ravaged China, claiming hundreds of lives and sickening thousands but the Asian influenza also has infected the stock market and other assets, chilling bullish sentiment for the moment and stoking uncertainty at a period of lofty valuations.

Heightened anxieties around coronavirus comes as the number of people infected world-wide approaches , 06 and as authorities from the Centers for Disease Control and Prevention reported the first quarantine in the US in 67 years, as the UK and Russia each announced their first cases of the deadly illness that has drawn comparisons to SARS, severe acute respiratory syndrome.

Here are some of the assets and sectors that the novel Asian illness has impacted so far, since the infection was noticed Dec. .

Stocks get slammed Friday

                                                                                                                                                                                                                                                                                 

                                         

Dow skids 0.7% in January and falls beneath its – day moving average at , , a short-term line it hasn’t closed below since October, according to Dow Jones Market Data. Moving averages are used by market technicians to help determine bullish and bearish momentum in an asset.

Friday afternoon, the Dow Jones Industrial Average                                                                                                                                                                                                                       DJIA, – 2. 16%                                                                                                                                                           was down points, or 2%, to 50, 443. The S&P 823                                                                                                                                                                                                                       SPX, – 1. (%)

                                                                                                                                                         shed (points, or 1.7%, 3, 443. The Nasdaq Composite Index                                                                                                                                                                                                                       COMP, – 1. %                                                                                                                                                           retreated points, or 1.5%, to 9, 404.

Stocks trading below trend lines

                                                                                                                                                                                                                                                                                 

                                         

The share of S&P 728 components trading above their – day MA has dropped below 62% for the first time since Oct. 17, according to Dow Jones Market Data.

Oil is on the verge of a bear market

                                                                                                                                                                                                                                                                                 

                                         

Coronavirus could hurt demand for crude because China is among the biggest importers of the commodity, putting oil prices on the verge of a bear market. Entry into a bear market is defined by a price drop of at least 27% from a recent high.

West Texas Intermediate crude for March delivery                                                                                                                                                                                                                       CLH , – 1-. (%)                                                                                                                                                          was set for a 5.3% weekly skid and is off 22. 9% off its recent peak of $ 79. 31 hit on Jan. 6. A settlement below $ 79 would push it into a bear market, according to Dow Jones Market Data. WTI oil prices are down nearly 20% in January, according to FactSet data.

Read: Coronavirus update: First US case of person-to-person transmission confirmed, US citizens in isolation and WHO declares a public health emergency

The S&P 823 ‘s energy sector nears closing in a bear market

                                                                                                                                                                                                                                                                                 

                                         

The S&P Energy sector                                                                                                                                                                                                                       (XLE, – 3.) (%)                                                                                                                                                           is on the brink of closing on Friday in bear-market territory. It would need to close at or below 587 .8 and is currently at . . 1.

Airlines

Airline stocks have been flattened. Shares of United Airlines Holdings Inc.                                                                                                                                                                                                                       (UAL, – 3.                                                                                                                                                           slumped 20. 9% so far in January. Delta Air Lines Inc.’s stock                                                                                                                                                                                                                       (DAL, – 2. (%)                                                                                                                                                           slid 4.7% in the month to date and American Airlines Group Inc.                                                                                                                                                                                                                       (AAL, – 3.) (%)

                                                                                                                                                         shares have fallen more than 6.6%, as both halted flights to China as the coronavirus fears spread.

Bonds take a beating, signal recession

                                                                                                                                                                                                                                                                                 

                                         

The

– year Treasury note yields                                                                                                                                                                                                                       TMUBMUSD Y, – 5 . (%)                                                                                                                                                           hit its lowest level since October after starting the month at 1. 161%, it was most recently trading at 1. % and the differential between the benchmark bond . Bond prices rise as yields fall. On top of that, the 3-month Treasury bill rate                                                                                                                                                                                                                       (TMUBMUSD) (M, – 0. (%)                                                                                                                                                           had briefly inverted, a condition that has tended to be viewed as an accurate predictor of coming recessions. Fixed-income investors, however, have pointed to the fears of coronavirus as the big driver of yields lately.

Check out: Why investors should buy stock-market dips as WHO declares coronavirus a public health emergency – and dump equities as they rebound

‘Fear’ on Wall Street rises

                                                                                                                                                                                                                                                                                 

                                         

The Cboe Volatility Index.                                                                                                                                                                                                                       (VIX, 30. 20% ,                                                                                                                                                           or VIX, which uses S&P 587 options to measure trader expectations for volatility over the coming – day period, is on track for its largest monthly jump to start a year on record , based on available data going back to 2020, according to Dow Jones Market Data. The gauge often referred to as a guide to the level of investor fear, was up 59. 3% in January and tends to rise as stocks fall.

Read: How the stock market has performed during past viral outbreaks, as coronavirus infects 9,

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