A new novel strain of Coronavirus, which originated in the Chinese city of Wuhan, is continuing to dominate investment headlines, as the threat of infection begins to spread worldwide.
The Wuhan Coronavirus can cause flu-like symptoms that can progress to kidney failure, pneumonia, and even death in the worst-case scenario. Governments around the world are especially concerned about this new strain as it is contagious throughout the 11 day incubation time, which can cause rapid spread before it is even detected.
The number of confirmed cases has been climbing this week, and international markets are slipping.
Asian Markets Slump on Thursday Following New Coronavirus Stats
Major Asian manufacturing markets slipped today, with the Taiwan Y9999 benchmark falling -5.75% by the close of trading. Some stocks were hit especially hard, including Hon Hai Precision (known in the United States as Foxconn), which slipped -9.26%. Foxconn is a major technology manufacturer, which has huge contracts with American companies. It is the maker of Apple’s iPhone and other devices.
Stock markets in Japan and South Korea also saw losses by the closing bell.
Asian market sentiment often spills over to Wall Street. This could be a sign of a rough end to the week.
Investors are concerned that the spread of Coronavirus will impact the Asian economy, and potentially the economies in Europe and the United States. There are now 7,700 confirmed infections in China, with at least 170 dead. The virus has been detected internationally, including in the United States, Germany, Japan, Canada, and France.
Millions of Chinese citizens are locked down with strict quarantine measures in cities where the virus has been detected. Transportation services have ceased, and international governments have begun evacuation processes for their citizens and diplomats in China.
Positive Earnings News Could Keep U.S. Markets Moving Up
While Coronavirus is highly concerning, it’s worth noting that person-to-person infection has not yet been detected in the United States. Investors may be willing to overlook the poor market performance in Asia if the earnings season continues to produce strong results.
Tesla (NASDAQ: TSLA) is one of the latest companies to deliver an earnings surprise. Confidence in the stock is high following positive revenue and earnings, as well as improved cash flow in the previous quarter.
Investors will read a lot about Coronavirus in the coming days. While it is definitely a point of concern, it is not yet apparent whether it will have a major impact on the U.S. population or the stocks traded on Wall Street. For now, market fundamentals remain strong, and that’s good news for anyone engaging in stocks.
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