Markets Are Pricing in a Coronavirus Recession
The deluge of business warnings around the coronavirus is alarming and a correction was overdue anyway. But is the world really headed for recession?
Down and out.
Photographer: Kazuhiro Nogi/AFP via Getty ImagesGlobal markets have entered the meltdown stage, accelerating in the past few days beyond a relatively orderly stock-market correction. With coronavirus cases now on all continents this is no longer a domestic China problem; that suddenly dawned on complacent investors after last weekend’s big outbreak in Italy.
Hence the stampede to get into cash as lockdowns and states of emergency have multiplied, from Lombardy to Japan’s northern island of Hokkaido. Any attempt by the stock markets to bounce is just being seen as an opportunity to offload more shares. This is a catch-up effect and is starting to look overdone.