Bear Panic Trumps Coronavirus Fears

by Rick Ackerman

Bulls doubled down on their bet Monday that the U.S. will remain an economic island, unaffected by the spread of coronavirus. The Dow was up nearly 400 points in the early going, briefly recouping two-thirds of what it had lost on Friday. Have traders lost their minds? China, after all, was in a state of lock-down, with quarantines in many large cities affecting the mobility of scores of millions of people. The potential impact of this on the global economy was not lost on energy traders, who sent crude-oil quotes plummeting a further $1.50 a barrel on top of last week’s nearly $3 loss. This happened despite Saudi Arabia’s threat to curtail supplies by whatever amount is necessary to prop up prices.

When the dust settled, the Dow Industrials had gained a respectable 144 points, pushed by… well, let’s allow someone from Wall Street who is paid to be an incurable optimist explain. According to Michael Mullaney, director of global markets research at Boston Partners, U.S. stock investors may have seen Friday’s selloff as a buying opportunity.

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