So check out S&P 500 futures’ action after hours this evening. The red arrows point to the reaction to news that the U.S. government was about to ask airlines to suspend flights between China and the U.S.. The green point to a followup comment from Washington that no such request would be made:
Hmm… but what if it’s actually a VERY smart idea, regardless of how the stock market reacts (not that the headline flip had anything to do with stock-price reaction — just sayin)?
Think about it; from what I gather, SARS paled in comparison, in terms of rate of spread, to this point:
“It took almost five months for SARS to spread to 3,000 people. The Wuhan coronavirus has infected almost 3,000 people in just 28 days.”
Although, thank goodness!, this coronavirus appears to be less life-threatening:
“An initial first impression is that this is significantly milder than SARS. That’s reassuring,” Eric Toner, a senior scientist at John Hopkins University, told Business Insider. “On the other hand, it may be more transmissible than SARS, at least in the community setting.”
While traders will indeed react to officials’ decisions, let’s hope that officials — particularly in this case — don’t indeed react to traders’ decisions!
Short-term reasoning when it comes to the market, and the economy, can lead to severe long-term consequences; which — on a different note — is of course the Fed’s monetary policy dilemma. I suspect tomorrow’s announcement will be telling…