Thursday, February 13, 2020

Presidents Day


Hello everybody,
Speaking of coronavirus, I came across an interesting chart yesterday:
In fact, the chart is not completely true: there was in fact a fall of about 3.5% when the news of the virus first came out, but still the reaction of the market this time around has been milder - so far. Have we gotten used to such outbreaks? It's still too early to say, though. The average reaction time in the previous 5 cases was 62 days, while in the present case, only 17 have passed.
There was some dramatic news yesterday about the acceleration in both mortality and morbidity from the virus in China. I don't know, having a history of half-truths and cover-ups before, maybe previous information was artificially understated, and now the authorities have decided to come clean and begin to tell all the truth and nothing but the truth, and hence the jump in figures? Hard to tell.
But taking into account an increased - again - uncertainty around the disease, plus some tense news about the Middle East, I will not be suprised if we see some unloading on the part of stock market investors to reduce the risk before the coming long week-end (President's Day). Beware.
Good luck, and happy Presidents Day!
ELP team

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