Friday was the foreshadowing of today. We didn't see it at the time because the coronavirus is a news driven event, and one headline will change the direction of the current move in a moment.
Whether this virus is a way overblown joke of a FLU, or a rogue laboratory-created pandemic with no cure, it doesn't matter. The markets are going to react as if it is a pandemic until the unknowns become better known.
Original Opinion in January
You will recall that in the end of January when the coronavirus started, I stated the virus was nothing worse than the Flu. When SARs and Zika started, the markets fell about 7%, and then bounced much higher than the starting point the moment it appeared that things would not be as bad as feared. We fell 3% for all-time highs at the start of coronavirus, and bounced back to new highs immediately. The selling was NOT as severe as I would have liked (at least 6%). Then we started to find out China was lying about the numbers and origin of the virus (go figure). I stated that this gave me cause for concern that we were not out of the woods yet.
Now things have changed. As long as the virus was predominantly in China, we could be lied to. Now it is spreading fast in S. Korea, and to some extent in Northern Italy. Both countries will not hide the numbers as blatantly as China, so people are now starting to get very concerned.
Despite the Fed printing money by the billions, easy cash does not stop a virus. It also doesn't create enough growth to compensate for entire economies not going to work. The Fed definitely can not print vaccines.
To make matters worse, this doesn't appear to be some chicken or bat soup virus. This appears to be accidentally (or not) released bio-engineers biological weapon. Dr. Frankenstein seems to have lost control of his monster.
With a lack of candor (should I say truth), Chinese people have lost faith in the government being honest with them. Thank God American media is much more honest (I pause a moment to stop laughing).