In yesterday’s post, I pointed out that the markets were taking a break, stopping the sudden slide to think about whether the news surrounding the coronavirus is really as bad as all that. Today, they appear to have decided that, yes, things are that bad and may be even worse. Perhaps, then, it is time for me to reassess my conclusions.

Yesterday, the global financial markets experienced another notable drop, reflecting investor concerns regarding the ongoing spread of the coronavirus. The major U.S. indices went down an additional 3 percent or more. These losses, on top of the drops we saw on Monday, have taken down the market significantly—with the S&P 500 more than 7 percent off its high of four days ago.

It is now clear that the coronavirus has escaped the attempted containment by Chinese authorities and has spread around the world. According to the World Health Organization, there are 79,331 confirmed cases, of which 77,262 are in China and 2,069 are outside of China (as of February 24, 2020). The two largest country clusters are in South Korea (with 232) and Italy (with 64). And many of those numbers seem to be on the rise, with the Washington Post reporting on February 24 that there were 833 confirmed cases in South Korea and 53 confirmed cases in the U.S.

Brad here. When I was younger, I had the oldest, most beat-up car of any of my friends. It was a 1981 Toyota Celica that I bought in 1988 and kept until 1997. Yes, I am cheap. My colleague Tom Scarlata, of Commonwealth’s Investment Management and Research group, is also cheap—which I applaud—as well as thoughtful. His observations and conclusions put some context around spending behaviors we see every day, but might not be thinking about enough. Thanks, Tom!

Brad here. Besides being an economics geek, I am and always have been a science and space geek. As a human, I regard the growing presence of private enterprise in space as a significant breakthrough. As an investor, I’m more than excited by the opportunities presented by exploring space. On the other hand, as a cynic, I’m also very aware of the risks and concerns associated with expanding our boundaries. Tom Ryan of Commonwealth’s Investment Management and Research department does a terrific job outlining the real opportunities, as well as the risks, of investing in the final frontier. Thanks, Tom—ad astra!

Brad here. One of the things we try to do as investors is see into the future. To some extent, we can—but not as much as we wish and often not as far as we think. In today’s post, Brian Glazer, a senior investment consultant here at Commonwealth, takes a look at how to keep those expectations under control.

This morning, I stopped to get a card and balloon for my son for Valentine’s Day. I was shocked—once again—at how much the greeting card companies have monetized our need to be loving parents, spouses, and so forth. With these kinds of prices, you would think retail spending would have soared last month. Think again.

January was a tough month. We started with a U.S. attack on an Iranian general (creating thoughts of war) and ended with the possibility of a new global pandemic (with the Wuhan coronavirus spreading around the world). In between, of course, we had the impeachment spectacle here in the U.S., as well as the British exit from the European Union. All in all, it was quite a difficult month from a news perspective. Which made it somewhat odd that markets were not hit harder than they were.

Brad here. Today, I’m pleased to introduce a post by Andrew Kitchings, a portfolio manager with Commonwealth’s Investment Management and Research team. Enjoy!

Tomorrow, we get the big one, the most (in my opinion) significant economic report of all: the jobs report. So, what should we expect?