Financial markets have realized over the past couple days that the threat to the global economy from the novel coronavirus, or COVID-19, is still very much real and growing.
Stocks lost over 1% across the board today, coming on the heels of a down day yesterday as well. This all really doesn’t matter obviously, unless you’re a day trader as the market has been overvalued for some time and ripe for a healthy correction (pardon the pun).
The numbers coming out of China are not to be trusted, but even at face value, they show the virus is spreading rapidly and the epidemic is not even close to being contained. What is even more disturbing are reports of serious outbreaks in South Korea, and Iran, which today reported deaths from the disease.
To put gas on the correction fire, today’s economic data showed the results of the virus are indeed beginning to be felt economically, with the U.S. Services PMI going into retraction.
Traders look to be taking money off the table for the weekend, preferring to take another look at market conditions on Monday morning.
Markit Manufacturing PMI (Feb) PREL printed at 50.8 vs 51.5 consensus estimate.
Markit Services PMI (Feb) PREL printed at 49.4 vs 52 estimate.
Markit PMI Composite (Feb) PREL printed at 49.6.
Existing Home Sales (MoM) (Jan) printed at 5.46M vs 5.43M estimate.
Existing Home Sales Change (MoM) (Jan) printed at -1.3% vs -1.8% estimate.