Markets do not know whether they are coming or going – the situation is fluid. We are in unchartered waters and COVID-19 is showing little proven sign that it’s about to go away and not get a lot worse. Meanwhile, the US cannot get any stimulus to US citizens nor companies until the US Senate votes on a mammoth $2 trillion coronavirus rescue package. Rumour has it that they cannot even agree on a time to vote and this appears to be weighing on markets with the Nikkei now down -2% at the time of writing and US Eminis bleeding out in the red following a positive start in the open.
Investors should still be prepared for bad news as the situation remains extremely fluid. Volatility is almost at the levels of 2008 according to the VIX, there is no light a the end of the tunnel yet without a vaccine, cure and the virus rapidly spreading. However, all eyes are back on China. With the Hubei lockdown lifted, after the number of new cases has been reported to slow, the world will be watching resumption of movement in and out of Wuhan, scheduled for April 8. It will serve as a template for markets the world over that have been affected by restraints on business operations.