25 Feb The increasing spread of Coronavirus – updated economic and investment implications
Key Points:
- While reported new coronavirus cases in China have slowed, the pickup in cases outside China has led to a renewed sharp fall in share markets and bond yields.
- Our base case is that the outbreak will be contained allowing share markets and bond yields to rebound in the June quarter.
- However, the hit to economic activity is deepening & the risks around Covid-19 becoming a pandemic have risen leaving shares vulnerable to more near term falls.
- The key for most investors though is to recognise that periodic share market falls are inevitable & hard to time & so it’s best to take a long-term approach to investing.
