Fears of the coronavirus have clearly gripped markets over the past week, causing the biggest one-week drop on Wall Street since the financial crisis. It’s also the fastest correction (10 per cent decline from previous peak) in history.
Are markets overreacting? It’s hard to be certain they are, as while the coronavirus outbreak appears to have stabilised in China, the risk is that it may yet wreak havoc in other major centres of global economic activity – Europe and the US – over coming weeks.
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David Bassanese is chief economist at BetaShares Exchange Traded Funds. He writes on markets specialising in debt, derivatives and monetary policy. He worked at the federal Treasury, OECD and Macquarie Bank. Connect with David on Twitter.
