The financial market is in the heart of the corona storm

Epidemic corona virus (nCoV) pneumonia since the beginning of 2020 has had serious consequences in all areas. The negative economic consequences have not been recorded, but certainly not small because China is the number 2 economy in the world.
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The global market wobbled

Although the data of economic loss has not been fully statistics, the financial market (TTTC) has immediately reflected in the price. Asian gold price last week increased by nearly 20 USD, approaching 1,590 USD / oz and maintained throughout the week. The domestic gold price is also close to 45 million dong / tael.

The US stock market plunged when the Dow Jones index lost the 29,000-point mark and moved further and further away from the record level achieved at the beginning of the year. The VIX Index - a measure of fear in the market - rose above its 2-month high.

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The stock markets of Japan, Korea, Singapore and Thailand - countries where corona virus infections have been recorded simultaneously go down. The Chinese CK index fell the most, like Hong Kong's Hang Seng, mainland China's CSI 300 and even the Shanghai index.

The strongest decline was in oil prices, when the light sweet crude oil crashed to close to the 50 USD / barrel mark, due to the sell-off of global investors because of fears of a serious decline in demand of the world's No. 2 economy energy demand, leading to a decline in demand from other countries.

Statistics of the transport sector alone during the Chinese New Year period fell more than 40%. Calculated in the past 3 weeks, oil prices have fallen by 20% (from 65 USD / barrel).

Yields on US government bonds (G-bonds) also fell, causing concerns that the yield curve will be reversed again, when the cash flow is pouring in here, pushing prices up. According to the statistics of just 1 week in January 2020, investors withdrew $ 13.1 billion from mutual funds and ETFs holding US securities, but poured $ 24.7 billion into bond funds. votes, marking the biggest funding week since 2013.

Meanwhile, the Vietnamese stock market closed for Tet so it was not affected during this period, but fell sharply at the opening session of Xuan Canh Ty. Specifically, in the January 30 session, VN Index evaporated more than 31 points (equivalent to 3.22%) and broke through the support level of 960 points.

In contrast, safe assets continued to take the throne when risky investment channels were sold off. In addition to gold, the Swiss Franc (CHF) and Japanese Yen (JPY) all increased but to a weaker extent.

Cryptocurrencies also benefit in this context, as Bitcoin and most altcoins are on the rise. In which Bitcoin has surpassed 9,000 USD, especially Bitcoin SV has increased more than 4 times, reaching 400 USD.

The future is uncertain

It can be said that the economic damage is not small at global level when the corona flu has not ended yet. Even many forecasts say that the epidemic has not reached its peak, so in the near future, the financial market will cover more negative trends. The cash flow will find a safe haven, so investment channels considered a "storm bay" will attract the cash flow.

Even the venture capital channels, which are considered risky like CK, can benefit the medical industry. Stocks of medical and pharmaceutical stocks in all countries' stock markets increased and domestic was no exception, when other industries all declined in the first session of the new spring, but this group still increased.

In fact, if there was no corona flu, the financial market was generally quite weak and the cash flow last year still focused on safe investment channels. After the US - China signed a phase 1 agreement to ease the trade war, it supported risky channels such as CK pushed the US stock indexes to continuously peak.

With the rise of Yuan (CNY) along with US Government bond, USDX decrease with gold, it gave a new ray of hope although the cash flow has not really returned. However, this incident could blow that hope away at least in the short term.

Because the corona flu certainly cannot end overnight, vaccines and effective treatments also take a year to develop, especially its consequences, leaving much time to overcome. .

With China extending the Tet holiday, many domestic and foreign businesses are forced to suspend operations at least until the end of February, airlines cancel part or all of flights to Wuhan. China is the "fatal blow" to the world's second largest economy.

In addition, the number of tourists from China is always very large globally, as well as international visitors to China have decreased dramatically, some places decreased by 99%. Even in countries without epidemics, people are also limited to the streets as well as to crowded places, which will result in many other business sectors being affected.

Many large organizations such as the World Bank, IMF, OECD, and The Economis all forecast that the world economy in 2020 will grow slowly before the nCoV epidemic occurs. Therefore, this new factor will put more pressure on the world economy.