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02/19/2020 | 06:41am EDT

It seems that nothing will stop markets from going up. Apple's lowering of targets yesterday because of the coronavirus did not phase investors. The share lost 1.8%, but the Nasdaq still finished on a new record after a symbolic gain of 0.06%. What conclusions can be drawn from this? That Apple is no longer the bellwether it used to be? That the markets remain in "never-ending rise" mode? That investors still think that the coronavirus is an epiphenomenon?

The Stoxx 600 index added half a percent, and the Nikkei close to 1 percent. Investors think that the Chinese authorities will eventually intervene on financial markets,  and make it all better.

Covid-19 claimed its 2000th victim in China yesterday, with 74,185 patients infected (+1749). However, 1921 of these deaths occurred in Hubei province and the WHO issued a reassuring statement citing a study showing that 80% of infected patients suffer from a mild form of the disease. You will tell me, the organization gives the impression that it has been changing its tune regularly for a month now, minimizing the epidemic at first, before suggesting that it could be very serious. Then it returned yesterday to a more measured position.

The fact remains that the coronavirus has visible consequences on the sectors that are used to working with very tight flows. Some car manufacturers are having to shut down production lines or are in the process of doing so due to a lack of component supply. Consumer electronics, as we have seen with Apple, is also suffering. The transport industry is probably paying the heaviest price for the crisis. International airlines are partly deprived of the windfall from connections to China and Chinese carriers are suffering greatly. Beijing is reportedly working on measures to help its airlines, including cash injections and mergers. The situation is even worse for cruise passengers. Carnival Plc or Royal Caribbean have seen their shares melt by more than 15% since 1 January and uncontrolled contamination on cruise ships is devastating publicity for the sector. It will take time to restore trust. I can’t help but wonder/worry about what will happen when Q1 numbers come in…

Stocks mentioned in the article
ChangeLast1st jan.
NIKKEI 225 3.88% 19389.43 Real-time Quote.-21.10%
STOXX EUROPE 600 -3.26% 310.9 Delayed Quote.-22.72%

Romain Fournier
© MarketScreener.com 2020
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