The COVID-19 fear trade is in play. Global stock markets have been fluctuating between relief and fear along with positive or negative news about the coronavirus outbreak, which has spread from Wuhan, China, to South Korea , Europe , the Middle East, the United States, Canada and South America.
These restrictions have put a tourniquet on supply chains. One Taiwanese company we spoke to has nearly 100% of its revenues originating in China, and according to management only 20% of its production is up and running; the CFO says that “there are so many new controls in place in various cities in China, preventing companies and people to resume normal activities.” At another company in which we have an interest, one executive told us that reopening its factory requiredgovernment approvals.