Largest Daily Rise in Virus Cases
The outbreak of coronavirus (officially named Covid-19 this week) is still very much a high-level threat globally. As of yesterday, over 43,000 people in China are confirmed to have the virus. The death toll there has also risen over 1000. On Monday, China noted its largest one-day spike in new cases, which soared by just under 2,500 cases. Along with the spike in cases, the death toll also saw its biggest increase with 108 new death reported.
The dramatic increase reflects that the virus is still developing in line with the WHO saying that China is still in the midst of an “intense outbreak” of the virus. The outbreak continues to develop around the world. The UK has confirmed fresh cases of the virus. The island of Majorca, a more remote place also has a confirmed case.
Cruise Ships in Quarantine
Cases of the virus have also been confirmed on cruise ships which is causing severe disruption to many cruise liners. The Diamond Princess has been quarantine in Japan since the start of February. 135 people were confirmed to have the virus. Many other cruise liners are now suspected to have the virus on board.
The Westerdam cruise ship (carrying 2000+ people) has been denied access to ports in Japan over fears that passengers are carrying the virus. Other cruise ships have also been quarantined. This includes the World Dream, carrying 3,600+ passengers – though no cases of the virus were confirmed.
The virus is now entering its second month and with the death toll already well above that of the SARS outbreak, which lasted for four months, there are grave concerns about how many more people could die.
Markets Remain Resilient
Despite the ongoing risks from the virus, markets are displaying a great deal of resilience with the SPX500 breaking out to fresh all-time highs this week. Despite the growing number of cases around the world, the death toll outside of China has been limited to just 2 victims so far. Unless that global death toll starts to rise, the recent improvement in many global economic indicators is likely to continue to offset the negative impact of the virus.
The move higher in the SPX500 this week has seen some selling kick in near highs. With the RSI indicator showing bearish divergence, there is the risk of a reversal lower here. If price breaks down below the 3358.56 level, we could see a deeper pull back with focus turning to the completion of the symmetry swing into the 3313.93 support.