The coronavirus is a flu virus, but the market’s emotional price fluctuations due to the uncertainty is instead making feel seasick.  Rallying strongly after the WHO declared a global health emergency, the US Futures appears ready to strip all back as the confirmed cases near 10K.  With the Shanghai market scheduled to reopen Sunday night, traders must carefully consider the risk they carry into the weekend.  Later tonight, the UK will leave the EU and begin a year-long trade negotiation.  Just another thing to weigh as the weekend approaches.

Asian markets closed mixed overnight as manufacturing numbers met expectations, but virus impacts continue to grow.  European markets are modestly red across the board ahead of the UK exit and the virus uncertainty continues to weigh on investor’s minds.  Here in the US, futures point to a gap down reversing yesterday’s end of day rally, ahead of earnings & economic reports. 

On the Calendar

On the Friday earnings calendar, we have just 60 companies reporting but there is no time to relax as we will hear from several potential market-moving companies.  Notable reports include BAH, CAT, CVX, CHD, CL, XOM, HON, ITW, KKR, LYB, PSX & WY.

Action Plan

If your beginning to get a little seasick with the wild price action of the index as the uncertainty of the virus outbreak continues to effect the emotions of the market.  At the end of the day, we had an incredibly bullish rally after the WHO declared a world health emergency.  However, the news of the death toll rising to 213 and the confirmed cases climbing above 9800 the futures market appears ready to take it all back with a nasty gap down.  It will be very interesting to see the impact when China begins resumes trading Sunday night.  Consider your risk carefully as we head into the weekend.

On the impeachment front, the left wants to call more witnesses extending the trial another week but the right is pushing to wrap it and put it behind them today.  Extending another week could have a minor market affect to keep us on our toes.  Later tonight the UK is signing the divorce papers with the EU but will begin and year-long transition period where they will attempt to work out a trade agreement.  Though there could be some currency fluctuations, how this decision will impact the overall market is anyone’s guess.  One thing for sure is there is a lot to consider heading into the weekend.

Trade Wisely,

Doug