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Coronavirus Disease 2019, or COVID-19, is a new viral infection that emerged in late 2019. The virus, which originated in Wuhan City, Hubei Province, China, has now spread to 32 countries, including the United States. With almost 79,000 cases and 2,462 deaths*, COVID-19 has caused concern and fear throughout the world. And, this has not gone unnoticed by the stock market. So, I wanted to take a look at how the markets are reacting to this new outbreak, and what we might expect in the future.

Dominating the news since the beginning of the year, COVID-19 has been blamed for much of the recent volatility in the stock market. As reported cases increase, and countries begin taking significant precautions, companies are starting to assess possible disruptions to their business. Whether it is supply chain problems, or less traffic in stores and restaurants, anticipated slowdowns are the common conclusion. And this is causing fear in the markets. In just the last three days (as of 2.24.2020), the ten year US Treasury yield has dropped from 1.57% to 1.37%. This is down from 1.91% at the beginning of the year. Treasury yields dropping is a sign of a rush to safety. And, while the S&P 500 is essentially flat year to date, it is down 4.73% over the last three days.

But, let’s take a look at how this has panned out in the past. With the SARS outbreak in 2003, there were 8,098 cases and 774 fatalities**. This is a mortality rate…

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