Investment Update February 25, 2020

Ann Miller |

Due to increased fears of the Coronavirus, specifically a stronger outbreak in Italy and the effect on the global economy, the Dow Jones Industrial Average was down 1,032 points or minus 3.56 % to close at 27,960 on Monday. As noted in our previous update of 01/29/2020 - “… While economic data remains strong, a pullback is not unexpected. A retreat of 3% to the 27,850 area would be reasonable … That would be roughly 900 points …”. 

A large daily sell-off is typically followed by a positive market day and then the selling may resume the following day.  However there was some heavier selling as the market was approaching the close yesterday and this was an indication that there would be some follow-through selling today.  01/29/2020 – “… the next level would be a retreat of 6 to 7% or the 26,900 level”. 

Remember, as the markets continue to rise, the “point” swings of the Dow can appear exaggerated in relation to percentages.  A well-rounded asset allocation in our portfolios is prescribed and we are holding to that.


From the World Health Organization as of 2/24/2020

Globally: 79,331 confirmed :715 new

China 77,262 confirmed:415 new, 2,595 deaths: 150 new

Outside of China 2,069 confirmed: 300 new, 29 countries: 1 new, 23 deaths: 6 new​


Should I worry about COVID-19?

…. Although for most people COVID-19 causes only mild illness, it can make some people very ill …

Are antibiotics effective in preventing or treating the COVID-19?

Antibiotics do not work against viruses; they only work on bacterial infections. COVID-19 is caused by a virus, so antibiotics do not work……

Is it safe to receive a package from any area where COVID-19 has been reported?

The likelihood of an infected person contaminating commercial goods is low and the risk of catching the virus that causes COVID-19 from a package that has been moved, travelled, and exposed to different conditions and temperature is also low……                COVID-19: Corona Virus Disease 2019

While we do not discount the personal and tragic losses due to the Corona and flu viruses in general, we do attempt to offer perspective on properly placed concerns versus outright fear.  The Centers for Disease Control or CDC estimates that, from October 1, 2019, through February 15, 2020, there have been 29,000,000 – 41,000,000 flu illnesses in the USA.  When broken down into types, sub-types, groups and sub-groups there are hundreds of different flu viruses. 

A pandemic can occur when a new and very different influenza A virus emerges that both infects people and has the ability to spread efficiently.  The Coronavirus appears to fit these criteria but on a relatively small scale, as of today, and this is the major concern.  This virus is related to the SARS-associated coronavirus that caused an outbreak of Severe Acute Respiratory Syndrome (SARS) between November 2002 and July 2003.  No cases of SARS have been reported worldwide since 2004.

The death rate in developed countries remains very low.  If any of the above mentioned 29,000,000 plus cases of Influenza were tracked by the media each day, it would certainly heighten our fear.  While there is no treatment for this virus, or for that matter any virus, the symptoms, such as fever, cough and shortness of breath are treated in the same manner as any other cold or flu.

In turn, there is a valid economic concern to factory closings, reduced travel and hotel bookings and many other economic generators.  The primary concern at this time is for the current earnings quarter.  We will continue to update you as the week progresses. 

Please call us with any questions or concerns – we are always available to you.

Source Information: Centers for Disease Control