How do virus attacks affect Wall Street?
This is a very short presentation on how previous virus attacks have affected Wall Street (daily time frame). I go back to 2013, plotting what was seen.
This is relevant in relation to the recent Wuhan coronavirus (WCV). Mainstream media have referred to WCV as a "deadly virus". This is frankly nonsense based on current data.
The case fatality ratio (CFR) is an important measure in assessing lethality of a virus. The CFR for influenza A(H1N1) in 2009 was 0.45%. For ebola virus, it is overall >50%.
For the Wuhan coronavirus (WCV) which may not be one virus strain, the CFR is currently estimated at <3% (I cannot provide references here but people can contact me for links to info).
But hold on - the 3% is not (at this time) for large populations of those infected. The average age group of people who have been killed WCV is currently around 60. Did I say 'average'? Yes - I did (which means I know there are some people who have been around 30). Attribution of WCV has also not been 100% caused by WCV either. The 'average' age group may fall (or increase) with time.
In summary
- ebola is definitely a deadly virus - the markets barely flinched if at all to Ebola.
- estimates of lethality of WCV are currently not robust.
My conclusion -
News and panic are what rules markets more than hard facts and figures.
Will the WCV outbreak be the pin that pricks the bubble? I don't know. It could well be the first of the dominoes to fall, setting off a chain reaction for slow burn down - instead of a serious correction. OR - WCV may well be insignificant. If it is, then expect a raging bull market to rebel! I cannot foresee the future!
Declarations & Disclaimers: I am not a virus expert, nor a financial expert. This post is opinion only based on data fully available in the public domain. Opinions here are not be be relied upon in making financial or trading decisions. If you who reads this makes such decisions, your losses are your own - should you suffer a loss. You sue yourself if you lose money.
This is relevant in relation to the recent Wuhan coronavirus (WCV). Mainstream media have referred to WCV as a "deadly virus". This is frankly nonsense based on current data.
The case fatality ratio (CFR) is an important measure in assessing lethality of a virus. The CFR for influenza A(H1N1) in 2009 was 0.45%. For ebola virus, it is overall >50%.
For the Wuhan coronavirus (WCV) which may not be one virus strain, the CFR is currently estimated at <3% (I cannot provide references here but people can contact me for links to info).
But hold on - the 3% is not (at this time) for large populations of those infected. The average age group of people who have been killed WCV is currently around 60. Did I say 'average'? Yes - I did (which means I know there are some people who have been around 30). Attribution of WCV has also not been 100% caused by WCV either. The 'average' age group may fall (or increase) with time.
In summary
- ebola is definitely a deadly virus - the markets barely flinched if at all to Ebola.
- estimates of lethality of WCV are currently not robust.
My conclusion -
- The media is responsible for selling its news.
- The media have been irresponsible in feeding panic, in selling its news.
News and panic are what rules markets more than hard facts and figures.
Will the WCV outbreak be the pin that pricks the bubble? I don't know. It could well be the first of the dominoes to fall, setting off a chain reaction for slow burn down - instead of a serious correction. OR - WCV may well be insignificant. If it is, then expect a raging bull market to rebel! I cannot foresee the future!
Declarations & Disclaimers: I am not a virus expert, nor a financial expert. This post is opinion only based on data fully available in the public domain. Opinions here are not be be relied upon in making financial or trading decisions. If you who reads this makes such decisions, your losses are your own - should you suffer a loss. You sue yourself if you lose money.
FED balance sheet 42% of GDP @ 2020-01-26. Does money have value anymore? [Different perspective on the virus youtu.be/NjTdvALChwk ]
As expected at round numbers like 800 price has bounced slightly back up to 28830 before a minor relaxation (at this time 15:05 2020-01-25 GMT) at 28821.
Anything is possible in these markets. Panic about viruses have not in their history caused major corrections. I'm NOT saying that a minor virus such as WCV can't trigger a major correction. It may as well as it may not. I minor pinprick could burst the bubble. On other hand maybe the bubble is not ready to pop.
On the daily time frame my estimate is that such a heavily bullish market is likely to be resilient to 'virus attack'. I won't be surprised if this market (DJI) pumps north by 61.8% from the last limb of fall (on the 1h time frame).
No predictions today or at any other time.