Coronavirus spreads to markets; low rates to fuel equities?

Coronavirus spreads to markets; low rates to fuel equities?

By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group

Coronavirus: Market Concerns Mount

  • Oil heads lower amid demand concerns as coronavirus spreads
  • Flight-to-quality into Treasuries cuts yields, gold prices head higher
  • Equities slump, could potential containment phase reverse course?
  • Follow the narrative, move quickly when storyline changes direction
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Will Low Rates Fuel the Fire in Equities?

  • S&P 500 market cap soars to 140% of GDP for first time since 2000
  • In 2000s, S&P market cap tumbled from 135% of GDP to just 40%
  • Market recovered to its highs in 2010s, but should investors worry?
  • Current interest rates, one-third of levels in 2000s, could be a game changer
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