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Morning Commentary

Virus Gripping Market

By Charles Payne, CEO & Principal Analyst
1/27/2020 9:04 AM

Word out of China that the coronavirus created a “grave” situation, coupled with reports it’s getting stronger, have sparked major selling in the market this morning.  Although the death toll has risen, the numbers pall in comparison to the SARS outbreak.  But the difference that has everyone concerned is the absence of symptoms. 

The unknown factor is also weighing on the market this morning.  This as 145 S&P 500 components are set to report, including most of the momentum names that have led this rally. 

This morning has seen upgrades and higher targets on some of the biggest winners scheduled to report this week:

$250 from $240 at Stifel

$2,300 from $2,100 at The Benchmark Company

$65 from $50 Rosenblatt

$50 from $45 at Susquehanna

Then there’s Boeing (BA), which is under pressure from conflicting reports of a possible commercial airline crash in Afghanistan.

We have to keep our powder dry and not panic.  It’s fine to take profits if underlying fundamentals seem to have peaked.  Keep in mind, some of the early 2020 rally was driven by a desire not to miss out, and now, that psychology and those buyers might be spooked out.  

Portfolio Approach


I’ve been through ups and downs in the market for 45 years. The American stock market is supposed to be a bellwether on American business (which is doing well) but evidently “globalism” and instant world news (internet) have become big players in investor sentiment.

Jim Fitts on 1/27/2020 10:28:12 AM
This is true to a degree but over the past 45 years major US equity indices have also come to represent global growth in addition to the US economy.  To that point the machines and programs also spark overreactions I'm not sure how much of today's selling represents human beings.  Then there are times when the market simply has more selling than buying which provides cover for those sitting on big gains to ring the register without triggering alarm.  CP

Charles Payne on 1/27/2020 11:09:56 AM
It is horrible that a deadly virus has broken out, but your point is well taken regarding SARS and some reference to reality and the markets overreaction. That the market reacts so extremely makes perfect sense as it usually moves on emotion and not fundamentals and is exactly why it is a perfect opportunity to buy on the dip provided us.

Thanks Charles for your continual insight, wisdom and just plain common sense.

Ray Weldon on 1/27/2020 10:29:22 AM

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