Share markets down, coronavirus blamed

The New Zealand S&P/NZX50 sharemarket index dropped 1.79% yesterday, with the business impact of the coronavirus (Covid-19) blamed.The S&P/NZX10 index dropped 2.37%.

The drop looks likely to continue today as the US stock market has dropped by nearly 1000 points in early Monday trading (US time).

RNZ: New Zealand stock market has worst day in four months amid coronavirus concerns

The New Zealand stock market has had its worse day in four months, amid fears the impact of the Covid-19 virus is widening.

The market was led lower by Air New Zealand, which fell nearly 6 percent, after warning its earnings may be hit as much as $75 million by the virus.

The spread of the virus outside China has darkened the outlook for world growth with infections and deaths rising in South Korea, Italy and the Middle East.

Australia’s benchmark index is also down about 2.25 percent, and Asian markets are softer.

Business Insider: Dow plummets almost 1,000 points as spreading coronavirus fears rattle traders

  • US stocks were swept up in a global sell-off on Monday as investors grappled with spreading coronavirus fears.
  • The Dow Jones industrial average plummeted as much as 997 points – or 3.4% – in early trading on Monday. The S&P 500 slid 2.5%.
  • Meanwhile, the Cboe Volatility Index – or VIX, widely known as the stock market’s fear gauge – spiked 40% to levels not seen since August.
  • The flight out of risk assets and into safe havens sent the US 30-year Treasury yield to a record low, and gold is trading at the most expensive levels all year.

The markets could bounce back, but it’s also possible this could burst the market bubble that was overdue for a correction at least.

Leave a comment

20 Comments

  1. David

     /  25th February 2020

    My Apple shares are off 4%, its carnage as they dip below $300…just as well I bought them at $119 on the back of Trumps election win. MAGA punt. The US is still flying along under Trump so looking for buying opportunities.

    In reality though the news out of Italy, Sth Korea and Iran over has been a bit jarring. In context though the outbreak is clearly slowing in China, the death rate is pretty low but its incubation period is growing. Mild forms last 2 weeks and bad ones last 3 to 5 weeks so very flu like so its a race to warmer weather.
    The deaths in Italy were all old and very ill people, one guy had a heart attack and caught it in hospital and another was in hospital with cancer and they were both over 80. It was a shock at how quickly it just appeared.

    Reply
    • Blazer

       /  25th February 2020

      your Apple shares are affected the same as anyone elses.
      What you paid for them is irrelevant..
      This is typical right wing bragging.

      Reply
      • David

         /  25th February 2020

        It was tongue in cheek Blazer, just joking around but I did get them for 119 which was just lucky timing.

        Reply
  2. The Dow is down by 1,000 points in one day, wiping out the year’s gains. That’s the Dow’s biggest point decline in more than two years and the third biggest in the history of the Dow. The yield on the benchmark 10-year Treasury note approached a record low; and gold prices climbed for the eighth straight session to a seven-year high.

    Not exactly a resounding endorsement of Trump’s economy.

    Although I guess a thousand point loss in a day looks good to a guy who managed to go broke running casinos.

    Reply
    • Alan Wilkinson

       /  25th February 2020

      So the virus is Trump”s fault too?

      Reply
      • Trump gutted the CDC. Now he bears the consequences.

        https://foreignpolicy.com/2020/01/31/coronavirus-china-trump-united-states-public-health-emergency-response/

        But… to be fair, he was talking about the Dow Joans…

        Reply
      • In April 2018, Trump fired the head of the DHS epidemic team. In May 2018, Trump ordered the NSC’s entire global health security unit shut down. In the short time Trump got rid of the government’s entire pandemic response chain of command.

        The global health section of CDC was so drastically cut by the Trump administration that the number of countries it was working in was reduced from 49 to 10.

        Neither team has since been rebuilt.

        And to cap that off, in his proposed 2021 budget he included another 16% cut in the CDC’s budget and a 10% overall reduction to the Department of Health and Human Services’ funding,

        America has never been so unprepared for a pandemic. That’s what the markets are reacting to. Wall Street is telling Trump he is a pathological liar and not to be trusted with Americans’ health and welfare.

        Reply
        • Alan Wilkinson

           /  25th February 2020

          To people not already suffering from TDS it would seem that the markets are reacting to the shut down of China’s manufacturing and logistics in its industrial heartland with the likely consequential demise of millions of their small businesses and banks. As well as the not understood development of an outbreak in Italy and a major one in Korea affecting Samsung and likely other major companies.

          I guess they just haven’t thought of blaming Trump for all that.

          Reply
          • Duker

             /  25th February 2020

            You are right of course. Trump is just there, interesting how he deals with it.

            Reply
            • Kitty Catkin

               /  25th February 2020

              If it rises suddenly, he’ll take the credit.

              If it falls, it’s for reasons beyond his control.

            • Duker

               /  25th February 2020

              Youre right on that too.
              The jobs numbers during the last year of Obama were fake, yet the same numbers a year later after his election were ‘outstanding’

          • Trump’s administration: totally on top of the coronavirus… until they hit a paywall.

            Incidentally, this is the former GOP nominee for Texas who tried to outlaw oral sex in Virginia when he was AG there. How ‘bout that? Criminalising a consenting adult’s choice of bedroom conduct.

            Cuccinelli and Trump just don’t grasp what they’re dealing with.

            Reply
    • Pink David

       /  25th February 2020

      “The Dow is down by 1,000 points in one day, wiping out the year’s gains. ”

      To put it another way, wiping out 56 days of gains.

      “That’s the Dow’s biggest point decline in more than two years and the third biggest in the history of the Dow. ”

      Of course it’s a large points drop. The down is at 27,000 odd. In 1929 it was at 350. The higher it goes over time, the more points there are in a drop.

      These are very lame attempts to deceive. This makes you every bit as much of a liar as Trump.

      Reply
      • Duker

         /  25th February 2020

        Are you saying there HASNT been a share price inflation bubble and the rise in prices matches earnings ?

        Reply
        • Pink David

           /  26th February 2020

          Where did you read that in my post?

          Reply
          • Duker

             /  26th February 2020

            Of course Im not , It was rhetorical question from the Socratic method.
            The share prices are a bubble, and could go pop at any time , often for any reason. You clearly havent thought ahead and are hoping you can get out ahead of the bumpkins.
            I got out around 20 days ago

            Reply
  3. Conspiratoor

     /  25th February 2020

    A great time to buy! Have some advice for corky though …sell those A2s

    Reply
    • Corky

       /  26th February 2020

      It’s a real conundrum. Sell and buy on the rebound. Or ride it out. I may toss a coin.

      Reply

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