The Wuhan coronavirus outbreak shook financial markets as stocks, crude oil, China's Yuan, and other assets have declined over the weekend. Nevertheless, Japan's Yen has increased in value although Japanese stocks have slumped. Products such as gold and treasuries also increased despite the epidemic.
According to Yahoo! Finance, investor confidence significantly declined giving manifestations that there has been growing fears about the economic and human impact of the Wuhan coronavirus. The report claimed that European futures declined by one percent while S&P 500 stocks significantly lost contracts after its index sank last Friday.
Stock futures on Chinese shares had the greatest loss at five percent in just three days. The Chinese Yuan also skipped this month's trade-deal driven gains which was supposedly expected to rise before the coronavirus outbreak exploded. The report claimed that the currency is not expected to recover anytime soon.
Moreover, it was also shown that the ten-year treasury yields including West Texas crude also hit their lowest value since October over the weekend. The only financial market that improved since Friday is Japan's Yen.
According to chief Asia market strategist at Axitrader Stephen Innes, any economic troubles that China would experience is expected to significantly affect industrial and consumption markets. He added that China's demise would spread to other countries like wildfire because the country has trade and financial linkages with other market players around the world. He also added that since stocks are declining in value, the best financial option would be cash for the next few weeks.
Since the spread of the disease, China has announced that it will extend its iconic Chinese Lunar New Year until February 2, 2020. Recent reports has suggested that thousands of people have already been affected by the deadly disease worldwide. Hence, Beijing has suspended sales of package tours which adversely affected Chinese travelers' spending. In turn, it also marked air transport providers to China as the worst performing market players in Japan's trading session.
According to Japan Times, news that point to difficulty of nations in containing the virus has led traders to rush out of their risk assets. Crude oil had dropped by two percent in the New York Stock Exchange.
Italian 10-year bonds also fell including Thailand's stocks which put a stop to its successive improvements since 2016. At present, the report revealed that that Apple, Facebook, and Samsung have yet to reveal their numbers. It was also mentioned that investors would have a Federal Reserve policy meeting soon to discuss the recent economic changes.
