Financial Markets Under Pressure

Financial markets are in crisis mode for a third day in a row as the coronavirus spreads.

So far this trading week has been extremely difficult for the main US financial index: after negative 3.56% on Monday, a decline of 3.15% followed on Tuesday. Since closing last Friday, the Dow Jones Industrial Average (DJI) has lost almost 2,000 points. And so far there are no signs of when this sell-off might end.

Reminder: When the Dow hit a new all-time high of 29,550 points some days ago, all the facts about the coronavirus were already known.

However, there is currently a classic “risk-off” scenario. Prices on the stock markets are falling, as are yields on bonds. Gold is widely bought, oil prices fall. And the “safe havens” in Forex are sought for, i.e. low-interest currencies such as the Swiss Franc and the Japanese Yen.

In this tense environment, some investors remain calm and even find positives.

One of them is the Oracle of Omaha, Warren Buffett, stating in his latest interview with CNBC that his long-term outlook remains unchanged.

We’re buying businesses to own for 20 or 30 years. We buy them in whole, we buy them in parts … and we think the 20- and 30-year outlook is not changed by the coronavirus.

Warren Buffett

What do you think will be the impact of the coronavirus on the financial markets? Share your thoughts in the comments section below.