- Last week the US markets temporarily recovered following the World Health Organization’s (WHO) announcement that the contagion situation was “indeed bad, but no cause for alarm”.
- The markets were boosted in what analysts described as the first “WHO bounce”.
- Commodity prices – except gold – have plunged following the Coronavirus outbreak.
Happy Sunday Invezztors. ‘Uncertainty’ has become a common word in a market characterised by constant swings of global commodity prices. As of Friday, Europe started decently before dropping, Asia was mixed, while the US futures were down.
Brexit went down, and the UK is officially on its own, with some expressing concerns over the move. But while the Brexit was a success, it doesn’t end at that. Markets movements are set to take place moving forward.
Well, we’ll get into Brexit some other day, for now, let’s talk about the deadly virus from Wuhan, China, called Coronavirus, and its impact on global commodity markets. So far, the virus has affected more than 20 countries globally and claimed more than 300 lives, even as 14,000 thousand others remain infected.
A little recap: Towards the end of last US markets temporarily recovered following the World Health Organization’s (WHO) announcement that the contagion situation was “indeed bad, but no cause for alarm”. And with that, the market had its first “WHO bounce”.
But the health organisation’s ‘bounce’ never lasted; the US would later issue a travel advisory preventing its citizens from visiting China.
Companies are also on lockdown, cautioning its staff members against travelling to the affected regions. JP Morgan Chase, Facebook, and Apple are among a few companies that have instituted staff travel bans. Fortune analysed measures being taken by various companies to curb the effects of the Coronavirus.
Commodity prices – except gold – have plunged following an outbreak of the virus. Since January 17, the Bloomberg Commodities Index has dropped by about 6%. Other commodities including Palm Oil, Copper, and Crude which are imported mainly by China are down even worse, following the closure of most businesses in the Asian country.
Gold, which thrives during such times, has also registered minimal gains, perhaps revealing how uncertain the market is, even when it comes to safe havens.
As the Coronavirus menace continues to devour markets, individual countries are taking actions that while are good-intentioned, they are set to throw the markets in a state of dubiety in the days to come.
According to BBC News, about 100 Germans have been flown home from Wuhan. Indian has evacuated about 300 of its citizens from the virus-stricken region, while the UK said it would airlift dozens of Foreign Office Staff from China.
Apple announced it would temporarily suspend its Chinese operations.