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Wuhan Virus Spreads, Global Markets Fall, Earnings Season Hits Peak

Global markets fall as the Wuhan Virus spreads and the death toll rises. This epidemic will get worse before it gets better.
Thomas Hughes
Coronavirus and flag of china, country where an outbreak started in Wuhan city

The U.S. Futures Are Down Sharply In Early Trading

The U.S. futures are down sharply in early Monday trading. The tech-heavy NASDAQ Composite is in the lead with a loss of -1.90% because of its heavy exposure to overseas markets.  The Dow Jones Industrial Average and S&P 500 are both down with losses in the range of -1.60%.

In health news, the number of confirmed cases of Wuhan Virus in China has risen to over 2,800. The number of deaths is now over 80 with as many as 500 critical cases. The number of confirmed cases in the U.S. has risen to 5. Experts are unsure just how bad the epidemic will get but it is certain to get worse before it gets better.

In stock news, shares of travel and leisure stocks are among the hardest hit. Airlines American, Delta, and United are all down more than -3.0%. Shares of Wynn and Las Vegas Sands are both down more than -6.0%. Other travel industries are down less but losses are running near -2.0%. Other stocks with international exposure are also moving lower with Apple, Disney and Nike all down more than -2.0%.

On the earnings front, this is the busiest week of earnings this cycle. Traders are on the lookout for roughly 200 reports from S&P 500 companies including several Dow components.

European Markets Are Down Sharply At Midday

The EU markets are down sharply at midday with broad losses across all sectors and industries. The German DAX is in the lead with a decline of -2.35% but both the FTSE and CAC are down more than -2.25%. The spreading Wuhan Virus is the root cause, it has introduced maximum uncertainty to the market and could derail 2020 economic outlook. On the economic front, the Ifo Institute says the first quarter 2020 GDP will grow about 0.20%.

In stock news, shares of airlines AirFrance KLM and British Airways parent are down about -6.0% in early trading. Shares of SEB, a French appliance maker, are also down about -6.0% but for different reasons, a downgrade from HSBC. At the other end of the spectrum shares of NMC Health are up more than 3.0%. A major investment firm increased its stake giving the embattled company a much-needed vote of confidence.

Japan Falls, Most Of Asia Closed For Holiday

Most markets in Asia are closed on Monday and for the week because of the Lunar New Year. The one that is open, the Japanese Nikkei, fell hard on the Wuhan Virus news. Down more than -2.0% at the end of the session it is likely to continue falling this week. Shares of travel and leisure companies were hit the hardest, losses in the group ranged -3.0% to -7.0%.

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