Feb 4, 2020 - Economy & Business

Why the stock market keeps rising despite coronavirus fears

Illustration: Sarah Grillo/Axios

Despite growing fears about the toll of the coronavirus on global economic growth, traders still seem happy to purchase stocks on days following selloffs — frequently citing the adage that there is no alternative to U.S. stocks, as most other assets provide a negligible return.

What they're saying: “The playbook has worked extremely well and it’s one that I’ve deployed, which is [to] rely on central bank injections because the marketplace believes that liquidity can decouple us from fundamentals for a very long time,” Mohamed El-Erian, chief economic adviser for Allianz, said during his CNBC interview.

  • “Everyone seems conditioned to behave this way. But it assumes the shock is temporary, containable and reversible. Those are phrases that are very hard to associate with coronavirus.”

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Coronavirus cases rise as 14 American evacuees infected

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's NHC; Note: China refers to mainland China and the Diamond Princess is the cruise ship offshore Yokohama, Japan. Map: Danielle Alberti/Axios

14 Americans evacuated from the Diamond Princess cruise ship tested positive for the novel coronavirus before being flown in a "specialist containment" on a plane repatriating U.S. citizens back home, the U.S. government said early Monday.

The big picture: COVID-19 has now killed at least 1,775 people and infected more than 70,000 others. Most cases and all but five of the deaths have occurred in mainland China.

Go deeperArrowUpdated 3 hours ago - Health

Oil markets may be overly spooked by coronavirus' energy impact

Two pedestrians in Jiangtan Park on Jan. 27 during the lockdown in Wuhan, China. Photo: Getty Images

Some analysts are beginning to wonder if oil markets are overly spooked by the potential for the coronavirus to dent energy demand as travel and economic activity are crimped.

Why it matters: The human health toll is what matters most, with at least 107 people dead so far. But the coronavirus is also rattling markets, and is arriving when the oil market was already awash in supplies and demand growth was modest.

Go deeperArrowJan 28, 2020

Stock market rallies despite coronavirus outbreak

Illustration: Aïda Amer/Axios

Little has changed about the fundamentals since last week's selloff that was the worst in months, but bullish stock traders have bid back all of the the S&P 500's losses and sent the Nasdaq to a new record high.

What's happening: The market continues to bet on generous central banks providing stimulus to help the global economy recover from the novel coronavirus outbreak that has stalled supply chains, closed businesses and quarantined millions of people.