If you’re following the news, you already know that financial markets across the globe have experienced increased volatility over the last several weeks, and particularly in the last several days. This bumpy performance is driven in part by the continued spread of the coronavirus “COVID-19” across parts of Asia and more recently, Europe.
Concerns about this coronavirus have led to sharp declines in both domestic and certain foreign fixed-income yields, as well as high volatility in global financial markets. In the U.S., the 10-year Treasury note reached a yield of 1.37% in early trading on Monday February 24, its lowest yield in four years. Equity markets have also experienced increased volatility, although the S&P 500 did reach a new high as recently as mid-February. It’s difficult to fully quantify the potential economic impact of COVID19, as it will largely depend on the length and severity of the outbreak. While the spread of the virus in China seems to have slowed, unfortunately it has increased in other parts of the world.
As always, we are closely monitoring market conditions, and we’re here to assist you with evaluating and understanding these economic developments. As a reminder, market volatility is both natural and expected, and in this case it serves as a reminder of the importance of a diversified portfolios across multiple asset classes as well as a long-term investing approach. If you have any questions or concerns we can help with, please feel free to reach out.