Why the stock markets now before the Virus panic – and how investors should react

After a weak January, the Dax seemed to shearing investors hardly the epidemic of the novel Coronavirus (COVID-19) in China. Almost the whole of February, the o

Why the stock markets now before the Virus panic – and how investors should react

After a weak January, the Dax seemed to shearing investors hardly the epidemic of the novel Coronavirus (COVID-19) in China. Almost the whole of February, the outbreak seemed mainly restricted to China – up at the weekend, two countries with massive increases in the number of Newly-Infected reported.

In South Korea are now 833 cases known, and in Italy, the number of COVID lap 19 patients of just three of the 152 cases to the top – the biggest outbreak outside of Asia. On Monday, the country reported its fourth death from the disease. Overall, the news Agency Bloomberg are infected, according to the data in the world 79.440 people, 2.624 Dead so far.

in order COVID-19, which is often compared with the SARS outbreak in 2002/2003, although far less lethal than SARS or Ebola. While COVID-19 currently has a mortality rate of about two per cent, succumbed to ten percent of all SARS patients in the disease, and Ebola kills even about half of the Infected. Nevertheless, the consequences, particularly of a cyclical nature could be severe. And that is exactly what shakes the markets. With Stock Selection in Europe, you will achieve excess Returns with System! (Partner offer) Now 30 days free of charge test!

Dax loses full-year profit

The Dax have lost 3.73% on 13.072 points. In the Deep of the Index dropped to 13,043 a counter. In order for the whole year are practically gains of the stock market, the barometer of the offset.

In the case of single share trip, it was especially - and economy-sensitive stocks, such as Lufthansa and also papers, their businesses could suffer from the Virus should it spread further. Thus, the share of the event organiser CTS Eventim on the MDax lost-end of a double-digit percentage.

profits there were, however, in the case of the plants, which are considered to be a "safe haven". The price for a fine ounce of Gold (31.1 grams) rose by 2.43 percent to 1.683 dollars. The yields of ten-year Federal bonds, which move opposite to price, fell further to minus 0.48 percent.

fears of a real pandemic

the SARS pandemic, when it was well-8.100 cases, only about one-tenth as many Infected, a cost of China, the Reuters news Agency, according to a percent of the gross domestic product (GDP). With a share of four percent of the global GDP, China was at the time, but far less significant. Today, the middle Kingdom accounts for almost a fifth of global economic power.

More: PUSH - fear the second SARS epidemic - a Second SARS epidemic? As bad as the Coronavirus markets and the economy may take

The fear of the market is not now, but only a stutter, the economic engine of China. The sudden increase of cases in countries such as Italy and South Korea shows that the outbreak may still be economies of escalation into a pandemic, a real global epidemic, with corresponding consequences for other people.

one Particularly controversial aspect is that many of the new infections have no direct connection to the country of origin China. In previously reported infections outside of China – such as the cases in the Bavarian town of Gauting was clear, reconstruct, through which travel what Person carried the Virus and the Fire in the Central Chinese city of Wuhan abroad.

the containment of the disease seems to be more difficult than initially thought. At the same time, the risk increases by the fact that it comes through state-ordered quarantines to a Standstill in the economy in the most affected regions. Cancel granted in Italy, for example, the carnival in Venice as well as some football matches in the top League (Serie A). With the stock recommendations of the Bernecker exchange-compass, you can get more out of your money! (Partner activity) 30 days free to try!

WHO chief: "we Are concerned about cases without epidemiological link"

decision-makers and market watchers are alarmed about. "The world economy is facing a slowdown, and this slowdown may be amplified by the so-called Coronavirus," said France's Finance Minister, Bruno Le Maire, according to "MarketWatch".

According to Stephen Innes, chief market strategist at AxiTrader, suggesting the spread of the Coronavirus without a direct connection to China that "the situation is extremely problematic, and the market could be pricing in all of this week's exponentially worse."

Also, Tedros Ghebreyesus, head of the world health organization, said at the weekend concerned. Although the number of cases outside of China is relatively small, "we are concerned about the number of cases without clear epidemiological connection to China, how about a trip to China or contact with a confirmed case," says Ghebreyesus, according to "CNN".

Important trend lines

Dax ripped-investors should be more losses of set. With the 500-points-Minus the week of the start of the benchmark index, fell under two short-term supports, the moving average over 50 days and the equivalent of over 100 days, which run at 13.405 respectively 13.140 points – a Signal that the medium-term wobbles upward trend just solid.

To the 200-day line, which suggests the longer-term Trend, and 12.630 points runs, the Index is still some distance. The sales are starting to accelerate, for example by means of a drop below the psychologically important mark of 13,000 points, is excluded, a longer downward trend. DAX 13.100,22 PT. -479,11 (-3,53%) Xetra

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support, could the Index possibly again at 12.900 points, the Low at the end of January, or in the area between 11.900 and 11,400 points, find the between lows in the summer of last year. This results in a downward potential of up to 13 per cent, and this in spite of massive losses on Monday. Small Caps Champion: your 3 pillars for a successful wealth accumulation. Successfully and safely in addition to values invest. (Partner quote) Here is an exclusive free trial!

As always, however, for investors: those Who invest with a long investment horizon, should consider in periods of volatility, as is currently equal to three times, whether a sale is really useful. The longer-term will be invested, the minor short-lived fluctuations in markets.

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Date Of Update: 24 February 2020, 14:00
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