COVID-19 Worry Overblown; Market Discounts Recession

- Given past outbreaks, investor panic over coronavirus health risks looks overblown

- Case growth slowing in China; it reportedly shut down last temp COVID-19 hospital

- There will be some economic disruption through 2Q but market should recover

The video in this report is only accessible to members

If you haven’t noticed, this column is called Signal from Noise, the point being to ignore the noise and focus on the market’s signal. Normally that’s what I try to accomplish but the noise lately is so loud that it must be addressed.  Indeed, in pointing out what the noise is, I believe we might reach the signal.

The market has been hit very hard by fear of coronavirus. Since reaching a high of 3386.15 on February 19, it’s basically been downhill and quickly in an unhappy rollercoaster ride for investors.  As of midday today, the Standard & Poor’s 500 index has fallen about 19% from its high. The Dow reached a bear market intra-day today.

Let’s break down the market worries—as I see them—for there are at least two caused by the rapid spread of coronavirus, or COVID-19, a new flu type pathogen that affects the lungs and has roughly  a 3%-4% mortality so far.

First, is this a serious health concern? Yes. Is the virus alone som...

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