Updates On COVID-19 & Saudi Arabia
Market Recap
Highlights
Crude Oil dips 30% after Saudi Arabia announces they will boost production and cut prices after failure to agree on continued collaboration with Russia.
Global cases of COVID-19 have reached 105,000, while growth of cases within China have slowed. Total cases in China currently sit at 80,000
20 Year Treasuries are up 30% for the year as investors rush to bonds. Prices rise as yields fall.
Economic data will be released this week and throughout the month from China. This will be our first real hard look at the economic impact of the Coronavirus beyond our own speculation. The virus began in China and will be used as an economic impact indicator for other countries that are currently affected in addition to other countries yet to be fully exposed. Over the weekend Italy began with a quarantine and fundamental ban on travel for its 17 million residents in northern Italy. Currently this has been extended nationwide. While there are only 500 cases so far in the US, the world will look to China to gauge the economic windfall it may have on their own countries. The US will discuss substantial economic relief measures that include a possible payroll tax cut and an additional decrease in interest rates.
In an effort to combat Russia, Saudi Arabia has decided to increase production at a time when demand has already decreased as a result of the Coronavirus along with a slash in prices to initiate a price war. Coupled with the news of more event and travel cancellations from the virus, this sent the markets down over 7% for the day and was the largest 1 day drop since 2008. On the year, markets are down 18% from their highs (a decline of 20% would mark this a full on bear market). With the Central Banks and Fed running out of options there is a chance we could see negative interest rates or 10 year treasuries close to zero as the price war for oil continues and the Coronavirus outbreak fails to be contained in the US.
What I’m Reading - John Hopkins Center for Health Security on COVID-19
For raw data numbers and daily updates on the Coronavirus I like to look here. This gives you all of the raw data reported by the various governmental organizations from each country where people are most affected along with relevant news stories.
This has been one of the best resources I’ve found on objective data.
What I’m Watching – Why We’re Not Ready for the Next Outbreak (2015)
With the global panic and non-stop media attention to COVID-19, it begs the question “Why weren’t we ready for this?” In this TED Talk from 2015, Bill Gates speaks on what we can learn from the previous Ebola outbreak and how we can apply these lessons towards future outbreaks. While there are many lessons in this for all of us, the one that stands out to me is this: “There’s no need to panic. We don’t have to hoard cans of spaghetti or go down into the basement. But we need to get going, because time is not on our side.”
What I’m Listening To – Your Daily Drive From Spotify
Radio the way you want it. Spotify will customize your commute based on the music you listen to and the relevant news of the day. As a financial advisor my news usually comes from the WSJ, AXIOS, and Marketplace however this can be customized to your own news preferences as well. It’s the best way to make your commute not only productive, but fun as well.
Another reason Spotify remains the largest audio platform over Apple Music.
On This Day
March 9, 1929
On this day in 1929, the forerunner of the Buenos Aires Stock Exchange was established, just in time to suffer through the worst depression in modern history.
March 9, 2008
On this day the S&P 500 reached a closing price of 676, what would later be known as the bottom of the financial crisis.