Another day of panic selling over coronavirus as OPEC fails to cut production
Another day of panic selling over coronavirus…
Like last Friday, markets ended this week with a massive sell-off until the final half hour when a rally lifted indices off their day’s lows. However, this Friday’s ninth-inning rally couldn’t push markets into the green to close the week. The Nasdaq shed 3.48% Friday, merely 8 points above its Feb. 28 close, while the TSX closed -2.29% Friday, but lost 88 points. A graph of this week’s indices resembles a Rocky Mountain of spikes on Tuesday and Wednesday, because the feds slashed interest rates by 0.5%, plus Joe Biden won Super Tuesday in the Democrat race. Then, markets fell, because the number of coronavirus cases continued to climb as panic rose.
As of Feb.7, the common flu had killed 10,000 Americans, while as of March 6, the coronavirus has claimed 14 American lives and 3,400 Chinese souls. Scientists say the coronavirus resembles the flu, and flu season ends in April when warm weather arrives. Another point to consider: the number of new cases in China is declining and the Shanghai Composite Index has risen 5.5% in the past month. Investors needn’t be virologists, but we must be clear-eyed rationalists to properly invest. In other words: take advantage of these dips, like JP Morgan slipping 5.17% or Home Depot losing 2.68%.
A final note from Friday: OPEC failed to agree on a production cut, because Russia effectively vetoed the idea. Unsurprisingly, WTI oil plunged below $42 and WCS tumbled past $28. Also, it was no surprise that Vermilion Energy slashed its massive dividend and slid over 18%.