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Coronavirus impact on the market

Jeff Shelton

Coronavirus, the world’s newest Pandemic, is having an effect on the worlds stock markets.   Today’s blog looks at the last 6 pandemics and their influence on the markets.  Let me say first, that any death, in any part of the world, is a tragedy, and we mourn for that family.  In the U.S alone, there were approximately 15 million, yes million, cases of diagnosed influenza in 2019 and over 8,000 deaths.  Worldwide, “The Flu” has a major impact on the health and well-being of many people.  Those that struggle the most are usually the young and old within our population.  The chart below shows how the world stock markets reacted immediately following the outbreak of each named virus.

Recent statistics suggest that the mortality rate on the Coronavirus is around 3%, versus the .05% for the above mentioned statistics for influenza in the U.S.  It seems that China in particular, and the rest of the world in general, are taking this recent health emergency seriously, making containment seem possible.  I watched a news report recently that suggested the drug companies may have a vaccine in 6-12 months, maybe less, based on the current level of resources being focused on research and experimentation.  Of all the influences on the market, political/environmental/fundamental/technical/economic/consumer emotions/etc., for me, the risk of dying is at the top of the list.  Fortunately, if history repeats itself, or even if it rhymes, I don’t see the Coronavirus having a major impact on the health of most Americans, or a negative blow to the markets over the long haul.  Time will tell, but for now, I don’t see the Coronavirus as a major headwind for the stock market in 2020.

Jeff Shelton Investment Advisor Representatives of, and securities and advisory services are offered through USA Financial Securities Corp., Member FINRA/SIPC. A Registered Investment Advisor located at 6020 E. Fulton St., Ada, MI 49301. Shelton Financial Group Inc. is not affiliated with USA Financial Securities.