Oil is down by 1.7% on the day
At some point, you have to wonder whether markets are being too aggressive in pricing fears surrounding the coronavirus outbreak situation?
In the case of equities, sure there is reason to argue for a deeper correction since stocks were more or less near all-time highs when the news struck. But for the case of commodities, how much is too much?
Since the news struck, oil is down by over 10% and the free fall is even worse when you look at copper prices for example:
For some context, copper is down by over 12% from its peak earlier this month and is on its worst losing streak in over six years currently.
If you're wondering why the aussie, kiwi, and loonie are continuing to struggle and why haven assets such as bonds are seeing steady bids - this is in part a large reason as well.
I don't think we have seen the worst yet when it comes to the coronavirus outbreak situation, but as the correction deepens, just be mindful that there's a fine line between pricing in justifiable fear and pricing in a real pandemic situation.
That will be made more clear once we get added clarity on the coronavirus outbreak but even so, always remember that markets never ever move in one direction all the time.