The day started out calm and quiet. After the first 90 minutes of trading where the SPX was in less than a $5 point range after the open, it felt as if the day was over already. A few minutes after, 10am Chicago time, the floor fell out. The SPX was up $3 points on the day and within 30 minutes, it was down -45. News had come out unexpectedly that there were deaths in S. Korea from the coronavirus that no one was expecting.
This was enough evidence that the stock was ignoring the reports of China manipulating the virus statistics because it was not proven was now likely true. The virus is spreading worse and more contagious than we have been hearing. Certainly, China has some explaining to do, but they are never going to come clean or be honest. China's economy is falling fast because of the virus shutting down business, and it is predicted by some some analysts that they will have a negative GDP. Keep in mind that this is a country that panics when their growth rate is less than 6–7% a year.
As has been the case with every virus scare that has taken the market lower, there is a subsequent bounce. The bounce off the bottom of SPX 3,341.03 came fast this time. And within 15 minutes, the SPX was $20 points (200 Dow points) higher.
The rest of the day saw the market nervously pair losses before the SPX closed down -12.92 at 3,373.23. This is still only 26+ points from 3,400.
The VIX had a low of 14.49, but got as high as 17.21 before closing at 15.56. We have been seeing the mean in the VIX slowly creep higher as people remain cautious about the virus, even when the market is at all-time highs.
Fed Ex is surprising everyone with shares closing up 3.77 at 164.91 (+2.34). The stock has been climbing with the virus because of shipments of medical supplies to China have to be flown in. The stock is actually acting like a coronavirus hedge. I know – nuts, huh?