Coronavirus Impact: S&P 500, DAX, Gold and Crude Oil Outlook

Posted 28 February, 2020

EQUITIES

 

The sale was based on the S&P 500 falling 6% this week. However, this move is unprecedented given that the index has fallen by as much as 12% during the SARS outbreak. Elsewhere, DAX has been one of the worst contributors to the 8% drop in response to coronavirus spread, although, as in the case of the S&P 500, the response to the virus outbreak is not uncommon, and there is a reason for further decline.

 

 

FIGURE 1. S&P 500 MOVING IN LINE WITH REACTION TO SARS OUTBREAK

 

Coronavirus Impact: S&P 500, DAX, Gold and Crude Oil Outlook

 

 

FIGURE 2. DAX DROP FROM CORONAVIRUS IS NOT UNUSUAL…. SCOPE FOR FURTHER LOSSES

 

Coronavirus Impact: S&P 500, DAX, Gold and Crude Oil Outlook

 

 

COMMODITIES

 

As was usually the case with gold prices during the outbreak, volumes of precious metals were higher, even above the average of $ 1,700. The precious metal also benefited from lower US yields, which have always been the lowest. Oil prices have fallen sharply compared to previous outbreaks as demand for jet fuel has declined, and China announced in early February that oil demand should fall by more than 25%. As the virus continues to spread throughout Europe and now affects America, oil prices remain vulnerable.

 

 

FIGURE 3. GOLD OUTPERFORMING HISTORICAL AVERAGE OF VIRUS OUTBREAKS

 

 

Coronavirus Impact: S&P 500, DAX, Gold and Crude Oil Outlook

 

FIGURE 4. OIL PRICES UNDERPERFORM RELATIVE TO PREVIOUS VIRUS OUTBREAKS

 

Coronavirus Impact: S&P 500, DAX, Gold and Crude Oil Outlook

 

Previous forecast

03 March, 2020 11:14

← Gold Prices May Fall as Chart Warns of Topping Below $1700

Gold prices retreated after briefly spiking to a seven-year high just below the $1700/oz figure.

Gold Prices May Fall as Chart Warns of Topping Below $1700

Next forecast

20 February, 2020 14:46

Canadian Dollar Forecast: GBP/CAD, CAD/CHF, NZD/CAD, EUR/CAD →

CANADIAN DOLLAR PRICE CHART, GBP/CAD, CAD/CHF, NZD/CAD, EUR/CAD – TALKING POINTS

Canadian Dollar Forecast: GBP/CAD, CAD/CHF, NZD/CAD, EUR/CAD
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