Market Watch Week of January 20th

January 31, 2020

Written by Samuel Buddy-Wiseman Barker & Steven Klos 



US and Canadian markets ended the week lower following updates on the coronavirus outbreak that spread fear about global economic disruptions. The S&P500, DJIA and NASDAQ indices closed down 0.85%, 1.11%, and 0.82%, respectively, while the TSX gained 0.09%. Before the outbreak, markets were consolidating recent gains as investors wait on a big earnings week ahead. The markets are also trying to digest the unusually high valuations we are seeing in large-cap stocks and the lower-yield environment we are seeing in fixed-income markets. The Bank of Canada held its first policy meeting last week, lowering their fourth-quarter forecasts due to weak consumer spending data. Analysts predict increased market volatility ahead as trade war disputes and spreading concerns of the coronavirus shock markets.


Spotlight: Everything you need to know about the Coronavirus


According to Health Canada, the typical coronavirus symptoms include headaches, fever, coughing and sore throat. More serious infections can cause other illnesses like severe acute respiratory syndrome (SARS), respiratory failure, pneumonia, and even kidney failure. Since the virus causes most of the symptoms to appear internally, infected individuals may appear to simply have a common cold, cough or show no symptoms at all.

How does it spread?

According to the United States’ Center for Disease Control and Prevention (CDC), the origins of this strain of coronavirus, named 2019-nCoV, came from a large seafood and animal market in Wuhan, China. This suggests that the first case of the disease was spread directly from animal to person. As the virus continues to spread, multiple individuals who hadn’t been in contact with animal markets have become infected; suggesting the virus can spread easily from person to person. Experts from the CDC believe that the virus spreads from person to person via the respiratory tract system. An example of this would be where an infected person would cough and droplets from said cough would enter a new host’s body when they inhale. The virus can also spread if an individual were to touch a heavily contaminated surface, then proceed to scratch their eyes, mouth or nose; inherently infecting themselves.

What to do if you are infected?

Though Health Canada says that the risk of being infected is low, they suggest that individuals remain at home when they are sick, avoid close contact with others, cover your mouth when you cough and wash hands frequently. Many believe that wearing a face mask is the best course of action in regard to staying safe, however, most masks don’t provide a hermetic seal. This means that very small drops of the virus suspended in the air can still get through to your respiratory system.


Effects on the Global Economy:

As fears of the virus spread internationally it poses major risks to the global economy as some of the world’s biggest companies, including Apple, have major supply chain players in China. China is the world’s largest economy and plays a key role in the global economic system as many goods are produced in the country. The impact will be increased as Wuhan, the host city, is a very important global transportation hub. Travel restrictions will also lead to issues for any business that requires people and goods to move around frequently. Consumer spending on entertainment and gifts will also be affected because leaving your home dramatically increases your risk of being exposed to the virus. We remain optimistic that doctors and health practitioners around the globe will be able to treat the virus accordingly.

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