Stocks tumble as virus toll climbs

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Coronavirus outbreak is an 'unexpected risk factor' for markets, analysts say

A man walks past an electronic display showing Asian markets indices outside a brokerage in Tokyo. Picture: REUTERS

China has already extended the Lunar New Year holiday to February 2 nationally, and to February 9 for Shanghai. On Tuesday, the country’s largest steelmaking city in northern Hebei province, Tangshan, suspended all public transit in an effort to prevent the spread of the virus. “The wildcard is not the fatality rate, but how infectious the Wuhan virus is,” Citi economists wrote in a note. “The economic impact will depend on how successfully this outbreak is contained.”

E-Mini futures for the S&P 500 reversed some of the losses after slumping 1.6% overnight for their biggest single day percentage loss since last October. They were last up 0.25%. Analysts at JPMorgan said the coronavirus outbreak was an “unexpected risk factor” for markets though they see the contagion as a regional rather than a global shock.

Treasury 10-year note yields dived as deep as 1.598% on Monday, the lowest since October 10. Yields on two-year paper also fell sharply while Fed fund futures rallied as investors priced in more risk of a rate cut later this year.

 

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