By James DiGeorgia
James Cramer, just a few weeks ago, was dismissing the threat of the coronavirus and then flipped his opinion. Yesterday on Yahoo's home page, he was featured in an article that warned the coronavirus could be 'more severe than thought.' We, however, have been warning our subscribers for weeks as the global health emergency emerged, the financial markets could be crushed. In our newsletter World Opportunity Investor we grabbed profits of $12,850 on Friday closing positions and another round of profits on short positions totaling $3,462 yesterday. Not bad for a $72 a year investment newsletter. We've also taken profits of 90% in January and again in February by closing positions in Gold and Energy Options Trader (3-month trial subscription for just $49).
Yesterday U.S. equities fell like a rock, putting the S&P 500 on pace for its most significant four-day loss since December 2018, as investors continued to be spooked by the latest coronavirus developments. The anticipation that the world economy may dip into a recession and the Chinese will need to dump Treasuries to cover the millions of firms that are on the verge of insolvency, and a resulting banking crisis, drove Treasuries higher; aided by indications the Federal Reserve is going to cut interest rates this year by as many as three times.
After opening positive by as many as 371 Dow points, the benchmark index turned lower, continuing the previous days' worst single-day loss in two years yesterday.
The wild market moves like we have seen in the last 36 hours prove investors, and professional money managers are all on edge over the economic impact of the coronavirus despite President Trump's repeated assurances that the coronavirus is under control and the market was looking pretty good. Unfortunately the market was down over 1,000 points at the time of the Tweet yesterday.
Feb 24, 2020 04:42:02 PM
The World Health Organization (WHO) continues to hold off from declaring a global pandemic even as cases surged in South Korea, Italy and Japan. One country that has not reported any cases and may have tens of thousands is North Korea. The fact is the WHO has no real idea of how many people are infected because physicians and scientists STILL don't have a reliable test for the potentially deadly virus.
Current Coronavirus Statistics From Cases That Have Been Reported
- Coronavirus Cases: 80,423
- Deaths: 2,711
- Recovered: 27,913
- Active Cases: 49,799
- Serious or Critical Cases: 9,211
- Mild Condition: 40,588
So while some traders and politicians may be taking encouragement from news about the development of treatments – the fact is we still don't have a reliable test for who has the virus. There are a reported 80,000 cases worldwide, but there could be 500,000 cases for all anyone knows for sure.
Bloomberg quoted analysts at Oxford Economics Ltd. Saying…
"The epidemic could wipe more than $1 trillion from the global domestic product, while the International Monetary Fund lowered its growth forecasts for the world economy."
President Trump is reportedly worried that he will be blamed for not handling the coronavirus crisis responsibly. He hasn't! And, unless he lifts all the tariffs on trade, he is still imposing on China he's liable to push the stock markets here in the U.S. off the cliff and our economy into a recession.
Geoff Garbacz editor of Gold and Energy Options Trader insists that the coronavirus is both a health and economic emergency, and the Erlanger Chart Room Indicators are showing a possible bottom is forming if the crisis is officially called a pandemic by the World Health Organization. We could see another massive drop in the major stock indexes around the world.