While I’ve been writing about the coronavirus for some time now, I finally feel like I’ve seen enough direct quantifiable impact to cover some key themes on the market and economy. I think the trends speak for themselves so I’m going to just say a few words about each to connect the dots and let the charts tell most of the story.

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The outbreak was initially contained to China with a few cases around the world that could be linked back to the source country. Not anymore. The number of infections in countries outside of China has exploded in the last two weeks.

The rise in cases worldwide has been met with a relative slowdown in the number of new cases being reported in China. So, the ratio of non-China cases to total cases has been climbing rapidly. Meaning, this is now a global outbreak.

Unfortunately, the spread has reached an immense number of countries, each with varying capabilities to combat the virus. China took intense measures to slow the outbreak. Some countries may be able to take similar action but not all.

After largely ignoring the news for almost a month since the initial situation report from the World Health Organization, the stock market took a massive hit last week.

In fact, the speed at which the market entered a correction of -10% off the all-time high was record breaking. It only took six days.

Gold, which is considered a safe-haven and kind of the perfect investment for preppers who are expecting the apocalypse, showed a strong rally but subsequent cool off.

Unlike the stock market, the 10-Year US Treasury, which is another safe-haven asset, has been on a rally since the very beginning (lower rates are a positive for this asset class). The 10-Year rate has never been lower. Ever.

Meanwhile, estimates for Gross Domestic Product have showed little change or even some improvement. This is expected as economic indicators operate on a lag. Perhaps in another month some adverse impact will begin to manifest in the data.

While it can be dangerous to completely assign one event as the driver of markets and the economy, COVID-19 represents an immense material threat. The trajectory of the disease is incredibly uncertain. Thus, the potential for impact has a wide range of outcomes and many of the downside scenarios are being priced in to forward-looking indicators such as the stock market.

It is still unclear what new information will be uncovered day by day or how bad the outbreak will ultimately be. I’ll continue to write as material information comes available. Until then, let’s continue to hope for the best.