Why the coronavirus outbreak is delivering a fresh dose of recession fear to the stock market

The old saw used to be that when the U.S. sneezes, the rest of the world catches a cold.

Now, a more apropos adage for market bears may be that when an outbreak of coronavirus grinds the world’s second-largest economy to a halt, the rest of the world catches a recession.

Indeed, recession fears resurfaced on Wall Street last week, even as equity markets stood not far from all-time highs, amid volatile trade that whipsawed mostly on jitters that supply chains and economies could suffer from the spread of the infectious illness that originated in Wuhan, China, known as COVID-19.

“The [coronavirus spread] definitely injects an element of uncertainty into markets for the near term and for the longer term as well,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

Analysts at BofA Global Research said the probabilities of a recession have increased and that is reflected in the action in long-bonds like the 10-year Treasury note and the 30-year Treasury bond, which plunged Friday to its lowest rate on record. Investors will flee to the presumed safety of U.S. government bonds, driving yields lower, with the hope of avoiding losses that can derail riskier assets in a selloff.

The 30-year bond yield TMUBMUSD30Y, -2.32% fell 5.2 basis points on Friday to 1.92%, based on Tradeweb data, to an all-time low of 1.89%. The 10-year note yield TMUBMUSD10Y, -2.90% also tumbled below the key level of 1.50%, last trading at 1.475%. Bond yields move in the opposite direction of prices.

BofA said a move for the 10-year below 1.4% could represent a tipping point for the market, one that raises the probability for a recession, particularly if the Federal Reserve continues to hold benchmark rates at the current 1.50-1.75% range.

Here’s how BofA’s analysts put it (see attached

Read More Here...

Why the coronavirus outbreak is delivering a fresh dose of recession fear to the stock market

The old saw used to be that when the U.S. sneezes, the rest of the world catches a cold.

Now, a more apropos adage for market bears may be that when an outbreak of coronavirus grinds the world’s second-largest economy to a halt, the rest of the world catches a recession.

Indeed, recession fears resurfaced on Wall Street last week, even as equity markets stood not far from all-time highs, amid volatile trade that whipsawed mostly on jitters that supply chains and economies could suffer from the spread of the infectious illness that originated in Wuhan, China, known as COVID-19.

“The [coronavirus spread] definitely injects an element of uncertainty into markets for the near term and for the longer term as well,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

Analysts at BofA Global Research said the probabilities of a recession have increased and that is reflected in the action in long-bonds like the 10-year Treasury note and the 30-year Treasury bond, which plunged Friday to its lowest rate on record. Investors will flee to the presumed safety of U.S. government bonds, driving yields lower, with the hope of avoiding losses that can derail riskier assets in a selloff.

The 30-year bond yield TMUBMUSD30Y, -2.32% fell 5.2 basis points on Friday to 1.92%, based on Tradeweb data, to an all-time low of 1.89%. The 10-year note yield TMUBMUSD10Y, -2.90% also tumbled below the key level of 1.50%, last trading at 1.475%. Bond yields move in the opposite direction of prices.

BofA said a move for the 10-year below 1.4% could represent a tipping point for the market, one that raises the probability for a recession, particularly if the Federal Reserve continues to hold benchmark rates at the current 1.50-1.75% range.

Here’s how BofA’s analysts put it (see attached

Read More Here...

Why the coronavirus outbreak is delivering a fresh dose of recession fear to the stock market

The old saw used to be that when the U.S. sneezes, the rest of the world catches a cold.

Now, a more apropos adage for market bears may be that when an outbreak of coronavirus grinds the world’s second-largest economy to a halt, the rest of the world catches a recession.

Indeed, recession fears resurfaced on Wall Street last week, even as equity markets stood not far from all-time highs, amid volatile trade that whipsawed mostly on jitters that supply chains and economies could suffer from the spread of the infectious illness that originated in Wuhan, China, known as COVID-19.

“The [coronavirus spread] definitely injects an element of uncertainty into markets for the near term and for the longer term as well,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

Analysts at BofA Global Research said the probabilities of a recession have increased and that is reflected in the action in long-bonds like the 10-year Treasury note and the 30-year Treasury bond, which plunged Friday to its lowest rate on record. Investors will flee to the presumed safety of U.S. government bonds, driving yields lower, with the hope of avoiding losses that can derail riskier assets in a selloff.

The 30-year bond yield TMUBMUSD30Y, -2.32% fell 5.2 basis points on Friday to 1.92%, based on Tradeweb data, to an all-time low of 1.89%. The 10-year note yield TMUBMUSD10Y, -2.90% also tumbled below the key level of 1.50%, last trading at 1.475%. Bond yields move in the opposite direction of prices.

BofA said a move for the 10-year below 1.4% could represent a tipping point for the market, one that raises the probability for a recession, particularly if the Federal Reserve continues to hold benchmark rates at the current 1.50-1.75% range.

Here’s how BofA’s analysts put it (see attached

Read More Here...

Why the coronavirus outbreak is delivering a fresh dose of recession fear to the stock market

The old saw used to be that when the U.S. sneezes, the rest of the world catches a cold.

Now, a more apropos adage for market bears may be that when an outbreak of coronavirus grinds the world’s second-largest economy to a halt, the rest of the world catches a recession.

Indeed, recession fears resurfaced on Wall Street last week, even as equity markets stood not far from all-time highs, amid volatile trade that whipsawed mostly on jitters that supply chains and economies could suffer from the spread of the infectious illness that originated in Wuhan, China, known as COVID-19.

“The [coronavirus spread] definitely injects an element of uncertainty into markets for the near term and for the longer term as well,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

Analysts at BofA Global Research said the probabilities of a recession have increased and that is reflected in the action in long-bonds like the 10-year Treasury note and the 30-year Treasury bond, which plunged Friday to its lowest rate on record. Investors will flee to the presumed safety of U.S. government bonds, driving yields lower, with the hope of avoiding losses that can derail riskier assets in a selloff.

The 30-year bond yield TMUBMUSD30Y, -2.32% fell 5.2 basis points on Friday to 1.92%, based on Tradeweb data, to an all-time low of 1.89%. The 10-year note yield TMUBMUSD10Y, -2.90% also tumbled below the key level of 1.50%, last trading at 1.475%. Bond yields move in the opposite direction of prices.

BofA said a move for the 10-year below 1.4% could represent a tipping point for the market, one that raises the probability for a recession, particularly if the Federal Reserve continues to hold benchmark rates at the current 1.50-1.75% range.

Here’s how BofA’s analysts put it (see attached

Read More Here...

New Coronavirus Cases In Iran Strikes Fear In Markets Sinking Stocks And Spiking Metals ETFs

Stocks fell again on Friday after continuing fears over the coronavirus, which has spiked volatility.

While the virus has largely been concentrated in China, the World health officials said Friday the COVID-19 coronavirus outbreak has extended to Iran, where health officials confirmed 18 new cases and 4 deaths in just two days, which is “very worrisome.”

Earlier in the day, Iran confirmed 13 new coronavirus cases, raising its national tally to 18. Seven people with the flu-like virus were diagnosed in Qom, four people in Tehran and two in Gilan.

The thus far modest contagion in Iran has been tied to a case in Canada and another infection of a 45-year-old woman in Lebanon after those patients traveled to the Middle East nation.

“The cases that we see in the rest of the world, although the numbers are small, but not linked to Wuhan or China, it’s very worrisome,” Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, said Friday at a news conference at the agency’s headquarters in Geneva. “These dots are actually very concerning.”

Health officials are receiving information about the patients in Iran, but “we have to engage them even more,” Tedros said.

World health officials still have the opportunity to contain the virus, he said, but that likelihood is decreasing every day.

“The window of opportunity is still there, but our window of opportunity is narrowing,” he said. “We need to act quickly before it closes completely.” He also cautioned: “This outbreak could still go in any direction.”

Outside of China, there are 1,152 cases across 26 countries and eight deaths, Tedros said.

The Dow Jones Industrial Average traded as much as 316 points lower as of 11 A.M. EST, or 1.1%, to break below 29,000 for the first time since Feb. 10. The S&P 500 as fell 1.1% as

Read More Here...

New Coronavirus Cases In Iran Strikes Fear In Markets Sinking Stocks And Spiking Metals ETFs

Stocks fell again on Friday after continuing fears over the coronavirus, which has spiked volatility.

While the virus has largely been concentrated in China, the World health officials said Friday the COVID-19 coronavirus outbreak has extended to Iran, where health officials confirmed 18 new cases and 4 deaths in just two days, which is “very worrisome.”

Earlier in the day, Iran confirmed 13 new coronavirus cases, raising its national tally to 18. Seven people with the flu-like virus were diagnosed in Qom, four people in Tehran and two in Gilan.

The thus far modest contagion in Iran has been tied to a case in Canada and another infection of a 45-year-old woman in Lebanon after those patients traveled to the Middle East nation.

“The cases that we see in the rest of the world, although the numbers are small, but not linked to Wuhan or China, it’s very worrisome,” Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, said Friday at a news conference at the agency’s headquarters in Geneva. “These dots are actually very concerning.”

Health officials are receiving information about the patients in Iran, but “we have to engage them even more,” Tedros said.

World health officials still have the opportunity to contain the virus, he said, but that likelihood is decreasing every day.

“The window of opportunity is still there, but our window of opportunity is narrowing,” he said. “We need to act quickly before it closes completely.” He also cautioned: “This outbreak could still go in any direction.”

Outside of China, there are 1,152 cases across 26 countries and eight deaths, Tedros said.

The Dow Jones Industrial Average traded as much as 316 points lower as of 11 A.M. EST, or 1.1%, to break below 29,000 for the first time since Feb. 10. The S&P 500 as fell 1.1% as

Read More Here...

New Coronavirus Cases In Iran Strikes Fear In Markets Sinking Stocks And Spiking Metals ETFs

Stocks fell again on Friday after continuing fears over the coronavirus, which has spiked volatility.

While the virus has largely been concentrated in China, the World health officials said Friday the COVID-19 coronavirus outbreak has extended to Iran, where health officials confirmed 18 new cases and 4 deaths in just two days, which is “very worrisome.”

Earlier in the day, Iran confirmed 13 new coronavirus cases, raising its national tally to 18. Seven people with the flu-like virus were diagnosed in Qom, four people in Tehran and two in Gilan.

The thus far modest contagion in Iran has been tied to a case in Canada and another infection of a 45-year-old woman in Lebanon after those patients traveled to the Middle East nation.

“The cases that we see in the rest of the world, although the numbers are small, but not linked to Wuhan or China, it’s very worrisome,” Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, said Friday at a news conference at the agency’s headquarters in Geneva. “These dots are actually very concerning.”

Health officials are receiving information about the patients in Iran, but “we have to engage them even more,” Tedros said.

World health officials still have the opportunity to contain the virus, he said, but that likelihood is decreasing every day.

“The window of opportunity is still there, but our window of opportunity is narrowing,” he said. “We need to act quickly before it closes completely.” He also cautioned: “This outbreak could still go in any direction.”

Outside of China, there are 1,152 cases across 26 countries and eight deaths, Tedros said.

The Dow Jones Industrial Average traded as much as 316 points lower as of 11 A.M. EST, or 1.1%, to break below 29,000 for the first time since Feb. 10. The S&P 500 as fell 1.1% as

Read More Here...

New Coronavirus Cases In Iran Strikes Fear In Markets Sinking Stocks And Spiking Metals ETFs

Stocks fell again on Friday after continuing fears over the coronavirus, which has spiked volatility.

While the virus has largely been concentrated in China, the World health officials said Friday the COVID-19 coronavirus outbreak has extended to Iran, where health officials confirmed 18 new cases and 4 deaths in just two days, which is “very worrisome.”

Earlier in the day, Iran confirmed 13 new coronavirus cases, raising its national tally to 18. Seven people with the flu-like virus were diagnosed in Qom, four people in Tehran and two in Gilan.

The thus far modest contagion in Iran has been tied to a case in Canada and another infection of a 45-year-old woman in Lebanon after those patients traveled to the Middle East nation.

“The cases that we see in the rest of the world, although the numbers are small, but not linked to Wuhan or China, it’s very worrisome,” Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, said Friday at a news conference at the agency’s headquarters in Geneva. “These dots are actually very concerning.”

Health officials are receiving information about the patients in Iran, but “we have to engage them even more,” Tedros said.

World health officials still have the opportunity to contain the virus, he said, but that likelihood is decreasing every day.

“The window of opportunity is still there, but our window of opportunity is narrowing,” he said. “We need to act quickly before it closes completely.” He also cautioned: “This outbreak could still go in any direction.”

Outside of China, there are 1,152 cases across 26 countries and eight deaths, Tedros said.

The Dow Jones Industrial Average traded as much as 316 points lower as of 11 A.M. EST, or 1.1%, to break below 29,000 for the first time since Feb. 10. The S&P 500 as fell 1.1% as

Read More Here...

New Coronavirus Cases In Iran Strikes Fear In Markets Sinking Stocks And Spiking Metals ETFs

Stocks fell again on Friday after continuing fears over the coronavirus, which has spiked volatility.

While the virus has largely been concentrated in China, the World health officials said Friday the COVID-19 coronavirus outbreak has extended to Iran, where health officials confirmed 18 new cases and 4 deaths in just two days, which is “very worrisome.”

Earlier in the day, Iran confirmed 13 new coronavirus cases, raising its national tally to 18. Seven people with the flu-like virus were diagnosed in Qom, four people in Tehran and two in Gilan.

The thus far modest contagion in Iran has been tied to a case in Canada and another infection of a 45-year-old woman in Lebanon after those patients traveled to the Middle East nation.

“The cases that we see in the rest of the world, although the numbers are small, but not linked to Wuhan or China, it’s very worrisome,” Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, said Friday at a news conference at the agency’s headquarters in Geneva. “These dots are actually very concerning.”

Health officials are receiving information about the patients in Iran, but “we have to engage them even more,” Tedros said.

World health officials still have the opportunity to contain the virus, he said, but that likelihood is decreasing every day.

“The window of opportunity is still there, but our window of opportunity is narrowing,” he said. “We need to act quickly before it closes completely.” He also cautioned: “This outbreak could still go in any direction.”

Outside of China, there are 1,152 cases across 26 countries and eight deaths, Tedros said.

The Dow Jones Industrial Average traded as much as 316 points lower as of 11 A.M. EST, or 1.1%, to break below 29,000 for the first time since Feb. 10. The S&P 500 as fell 1.1% as

Read More Here...

7 Small Cap Stocks That Pack a Wallop

You’ve probably seeing a bunch of stories lately about how the stock market rally has become too narrow. What’s that mean? Simply put, a few mega-cap tech stocks are responsible for most of the market’s gains lately. If you own the huge tech names, it’s been great recently. But much of the market, and especially small stocks, has been left behind.

Some investors have decided to stop fighting the wave. No price is too high for something like Apple (NASDAQ:AAPL), apparently, as long as the momentum keeps going. Even an earnings warning could hardly keep Apple down.

At some point, though, the situation will flip. As a result, some investors are booking gains on their highly successful tech positions, and are rotating into other stocks that haven’t had huge rallies yet.

Historically, small capitalization stocks have outperformed the broad market over the years. And after a disappointing 2019, they may be ready to punch above their weight in 2020. Consider that the new coronavirus from China is having a disproportionate impact on Chinese companies, and American multinationals with a large presence in Asia. Meanwhile, smaller American firms are much less sensitive to the problems.

As such, this could be a great time to move some money out of overpriced high-fliers and pick up some small stocks while they’re still cheap.

Global Water Resources (GWRS)

Source: Shutterstock

If you’re thinking of exciting small-cap stocks, a utility probably wouldn’t be your first choice. But don’t be so quick to count out Global Water Resources (NASDAQ:GWRS). The $300 million market capitalization Arizona water utility is a fascinating company.

Right now, it’s fairly modest, as it serves only about 50,000 water taps. These are primarily in the Phoenix suburb of Maricopa. However, it, like Phoenix, is booming. Its customer base has nearly

Read More Here...