Last week of February priced in only a part of the negative supply-side shock of the Corona virus outbreak. When theme parks and public events such as the Olympics are either under consideration for cancelation or being canceled at an accelerating rate, people are staying home rather than going out such as in Italy and France or tourism falls to zero in some geographic regions, things are looking pretty bad. The virus tends to incubate within an infected person for at least several weeks before symptoms even start to manifest. This means we are only seeing the beginning of a global pandemic. Businesses will lose revenue increasingly, supply chains will be disrupted, job losses will increase, and labor availability may become constrained as people become more afraid to go to work or take public transportation. Only a vaccine can cure this. What we’ll get instead is a Fed rate cut which will at best cause only a dead cat bounce in the markets.

I am not recommending stocks or funds this month because it is best to hold all cash instead. Once the market fear index is at a maximum, only then will their be a market bottom. The coronavirus is no hoax as Pres. Trump claims. As a politician invested in the stock markets performance it is not surprising he would make such a claim. Unfortunately, the opposite is true. Worse, about the time the market prices in all the real negative effects of the virus outbreak, we will face the election and threat of Bernie Sanders. This could represent another downward “pricing in” spiral for which there will be no recovery until the B.S. threat is replaced by something more market friendly. That’s may outlook for now. Good luck!