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Coronavirus spread forces investors to think again
As the humanitarian costs of the coronavirus continue to rise, outbreaks beyond China are challenging the previous consensus view that the impact on markets could be relatively contained. Global stock markets are down, and negative sentiment may become a self-fulfilling prophecy, adding to the need for caution and an active approach.
China has acted to bring the coronavirus under control, but global outbreaks will prolong uncertainty and stock markets across the world have been impacted
While the outbreak is impacting demand – both in China and globally – there will also be global supply implications, particularly for the automotive and technology sectors
We expect the dominant trend to be a “flight to safety” into the US dollar and US assets
This crisis underscores the vulnerable outlook for global risk assets following a strong end to 2019, but long-term investors will want to sit tight and monitor how events play out