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Stocks, Crude Have Seen Enough ‘Deadly Respiratory Illness’ Headlines For One Week

Let's just get to the weekend before anything really bad happens.

Markets finally got sick (no pun intended) of hearing about mysterious, deadly respiratory illnesses on Friday. Reports of a second (and third) case of Wuhan virus in the US were as good an excuse as any for some profit-taking on Wall Street, where equities tumbled the most since October, and bonds extended gains. The S&P was on track for its first daily loss of 1% or more since October 8 (see top pane below). By the time the closing bell sounded, the benchmark managed to escape down just 0.9%, so the streak of sessions without a 1% loss is intact - for now. Volume was around 30% above average Friday. Friday also marked a rare stumble for big-cap tech, which many believe is ripe for a correction after surging to some of the most overbought levels since the dot-com bubble. To say US stocks are overdue for a pullback would be to understate the case. Forward multiples are stretched and there's more than a little ambiguity around whether EPS growth will rebound after what will likely be a second consecutive quarter of declining profits. Meanwhile, 10-year yields finally fell below the knee-jerk lows hit in the frantic minutes around Iran's counterstrikes on US interests in I
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1 comment on “Stocks, Crude Have Seen Enough ‘Deadly Respiratory Illness’ Headlines For One Week

  1. hookandgo says:

    H-Man, the recent events suggest this market will respond to anything, in a big way, that is negative. The issue is whether that “big way” event has any sticking power. If it doesn’t stick, the market bounces back up. As you have noted, killing a general and impeachment have done little to move the market. The “virus” on the other hand may have sticking power. A Black Swan event no one saw on the radar. If the virus turns into a head cold, time for the bounce up. The virus turns into a pandemic, hang on.

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