With traders having learned to ignore coronavirus news thanks to manipulated and fabricated new case "data" out of China showing the pandemic was easing, on Monday markets got a very rude wake up call and plunged after South Korea and Italy reported a sudden surge in news cases as two new offshore viral clusters emerged. As Saxo Bank's Eleanor Creagh writes, with South Korea - a key supply chain center and logistics hub - now on high alert level, the latest spike in overnight cases is intensifying the already ongoing regional supply chain disruptions.
The coronavirus has now killed 2,592 people in China (and like orders of magnitude more) which has reported 77,150 cases, and spread to some 28 other countries and territories, with a death toll outside of China around two dozen. And while equities to date had been resilient in ignoring the data, with contagion picking up outside of China, complacent markets have woken up to the realities of what has clearly been a huge mispricing of risk, and the result is nothing short of a global bloodbath in what is shaping up to be "Red Monday":
As a result, US index futures tumbled alongside stocks in Europe and Asia on Monday, as authorities struggled to keep the coronavirus from spreading more widely outside China, and to keep investors happy after China failed to impress markets with the raft of stimulus measures announced over the weekend. Safe-havens such as gold surged and U.S. Treasury yields reached their lowest since mid- 2016, as volatility indicators exploded.