The Corona virus seems somewhat in control in China. But we currently do see that outside China, many more cases are being reported. There is for example a growing amount of infections in South Korea. South Korea saw a 20-fold increase in Corona virus cases in just 5 days and currently has to deal with 602 cases.
Problems in italy with corona
Next to that, the situation in Italy also becomes quite a nervous one. A couple of days back nearly no one was infected in Italy and currently they do have over 100 reported cases. France is also getting worried with health minister Oliver Veran saying that it is very likely that new cases will be reported in France as Italy does not have the disease under control yet.
The exponential growth in some regions outside China might bring a situation where other countries also do have to take very severe measures like what China did in Huwan. If these outbreaks outside China keep on happening, this will put a lot of pressure on the stock market. Rational fears because of the slump in world GDP can be expected, but also just fear because of the unknown. In such a case the stock market volatility can creep up quickly.
bernie to take a strong lead
Bernie Sanders has been doing very well lately in the Democratic primaries. Next to that, Sanders is gaining more momentum thanks to the bad performance of Bloomberg in his first Democratic Presendential debate last week. Before this debate, the odds for Sanders and Bloomberg to become the Democratic candidate were more or less equal. Currently Bernie is the one to beat and looks like heading towards nomination. Still, very important events still have to take place. Currently only 71 delegates have been confirmed and Bernie Sanders needs 1991 delegates to win the nomination. Bernie currently leads with 28 versus 22 for Buttegieg. The rest is miles away. Bloomberg has not taken part yet in the Democratic primaries. We are just two weeks away from the very important so called Super Tuesday. It is on the 3rd of March. On that date the greatest amount of states hold primary elections and caucuses. A significant amount of total delegates can be won on that day. A convincing win on Super Tuesday will often lead to nomination in the end.
Bernie burns market cap
Bernie Sanders is bad for the financial markets, but the markets do believe that if Sanders is nominated he will easily be defeated by Trump. This can again be positive for the financial markets. Anyway, if Trump has to deal with Sanders on the general elections, very high volatility can be expected if Sanders would win. A huge sell off in equities will be the result.
What to watch?
- Super Tuesday on the 3rd of March.
- Chinese figures in the upcoming weeks. They will give a better view on the impact the Corona virus really has.