Risk And Reward
Latest market behavior has been anything but calm, to say the least. Actually, for anyone who listens to news, it’s downright scary: consecutive and almost non-stop big daily loss for the past week and there is no sign of abating. Let’s first review some background information.
Twin evils for the economy
First, a word of clarification: common coronavirus have existed in human for a while in a flu (see CDC), the ‘novel’ or Covid-19 is a different breed of virus. We have seen many media reports (and even some officials) have confused with this new virus with the old ones. So be careful on reading those news.
The current virus outbreak is unfolding in a rapid speed, just as described in our previous newsletter. The continuing spread will eventually force local and federal governments to adopt more prevention measures that in turn affect both financial markets (evidently) and economy (later). This is what had caused big stock market loss last week.
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