Amid a copious coronavirus outbreak across the globe which might have already been turned in to a Pandemic, though WHO seems to be taking a cautious approach by still dubbing it as an epidemic to prevent possible market routs, a number of withering words for the money markets such as “correction,” “bear market” or “recession” were being used more frequently over the past few weeks in more than a year, as investors were failing to assess the scale of probable financial fatalities amid growing uncertainty about the behaviour of the highly contagious Covid-19, which had killed nearly 3,500 people across the world and infected more than 102,000 since January 23rd, just before the onset of China’s New Moon Year holidays.
On top of that, as the virus has been spreading in to more US States and getting closer to the US capital, investors became increasingly worries which in effect had led to a cascade of violent swings in the money markets across the globe, while Saudi’s latest move to start off an all-out crude oil price war targeting the US Shales and Russian crude had compounded the market complexion further.
As 19 people had died thus far from 450 diagnosed Covid-19 cases in the United States and the regulators had already launched containment measures which would more likely to rattle financial market this week, expressing cautions of further corpulent fallouts in a near-term outlook, Senior Portfolio Manager and CEO of Leader Capital John Lekas who predicted a recession would be likely, wrote in a client note on Sunday (March 8th), “The market has not caught up to the facts.
We are thinking another 20% or so lower in equity markets this year. Basically, we just jumped off a 20-story building and we are at floor 10”.