Sharechat Logo

Stocks Pare Losses After WHO Coronavirus Remarks

Friday 31st January 2020

Text too small?

U.S. stocks pared losses, while bonds came off session highs after the World Health Organization stepped up efforts to combat the coronavirus by declaring a global health emergency.

The S&P 500 Index rebounded from its lows after WHO said travel and trade restrictions were not necessary, removing at least temporarily a threat to the global economy. The organization also commended China’s efforts to contain the disease. Equities have been under pressure since the outbreak last week, while havens from Treasuries to gold have rallied as investors fretted the virus would derail fragile growth around the world.

A key slice of the Treasury yield curve inverted for the first time since October, which may be a signal that traders are concerned about policy makers’ ability to counter headwinds as the coronavirus threatens to disrupt global growth. Federal Reserve Chairman Jerome Powell said Wednesday that the viral outbreak will likely hit the Chinese economy and could spill wider, but it was too early to judge what impact it would have on the U.S.

“The market maybe doesn’t really know how to process the impact of this particular event,” Kathryn Kaminski, chief research strategist at AlphaSimplex Group, said by phone. “People may be moving on headlines or there may also be general concern about not being sure what this means.”

Corporations are grappling with the rapidly spreading of the coronavirus that threatens a key growth market. Tesla Inc. expects a production delay in China, McDonald’s Corp. and Starbucks Corp. closed thousands of stores combined in the country while Apple Inc. is preparing for supply-chain disruptions. The hit to the world’s second-largest economy could exceed that seen during the SARS outbreak of 2003, according to Nomura Holdings Inc.

Traders also assessed a flurry of corporate earnings, with a rally in Microsoft Corp. and Coca-Cola Co. on solid results offsetting United Parcel Service Inc. and Facebook Inc.’s declines after underwhelming results.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Managed Exit From Togo Group
SkyCity on S&P negative credit watch
Coronavirus sell-off leaves investors keeping their distance
Proposal for VHP ASX foreign exempt listing not proceeding
The Reserve bank’s temporary ban affects more than $1b of securities
Yesterday Kathmandu confirmed it was raising $207m in order to cope and help it survive the turbulent Covid -19 pandemic
Rabobank Results
NZ banks not allowed to pay dividends until recovery, RBNZ announces
RBNZ changes affecting ANB Capital Notes
Trading update and completion of big chill acquisition

IRG See IRG research reports