Risk Off

Asian stocks looked primed for heavy losses after U.S. equities tumbled with Treasury yields on renewed worries about the impact of the coronavirus. Gold surged with the yen and the Swiss franc, and equity futures declined more than 2% in Japan and Australia. The S&P 500 Index fell more than 3%, with investor confidence shaken as virus cases continued to rise across the U.S. despite efforts to contain the outbreak and its impact. The yield on 10-year Treasuries slumped to as low as 0.90% and Australian equivalents tracked those moves Friday, plumbing fresh all-time lows. Global equities have recovered some of the recent losses but still remain about 10% below the all-time high reached last month. Still, some saw an opportunity in the sell-off. Action from central banks and governments will counter the economic hit from the virus, according to JPMorgan Chase & Co. strategists who had previously been telling clients to trim risky bets. The team advised boosting equity holdings.

In the Dark

What’s been driving the stock market this week? Coronavirus? Optimism over Fed policy? Pessimism over Fed policy? Optimism over the government’s response? Pessimism over the government’s response? The Beige Book? Joe Biden? The ink’s barely dry on one view, and the market goes careening the other way. Everything depends on how the virus outbreak will play out. And nobody has a clue. “When you have a 4.5% up day in the market and a 2% down day — what does that mean?” says Kathryn Kaminski of AlphaSimplex Group. “It just means we don’t know what’s going on.” The result has been historical turbulence, swings that rank with any before. The Cboe Volatility Index, or the VIX, has remained above 30 for six consecutive sessions, the longest streak since 2011. Gains on Monday turned to losses Tuesday turned to gains Wednesday turned to losses Thursday. In nine trading sessions, three have seen the S&P 500 close up or down 4%, and four others brought 3% dives. And the fear gauge is poised to close above its emerging markets counterpart by the most on record, based on data going back to 2011.

Staff Splitting

Global banks are stepping up their response to the coronavirus, shifting operations as the outbreak spreads in New York, London and other financial hubs. JPMorgan and Danske Bank in Copenhagen are dividing their sales and trading workers, sending some employees to back-up locations to reduce disruptions if employees are exposed to the virus. Wells Fargo restricted non-essential travel in the U.S., Goldman Sachs is planning to split workers among rotating teams and Royal Bank of Canada turned a conference scheduled for next week into a virtual event. The moves go beyond previous efforts — banks had been testing and adjusting plans for keeping critical operations open through a potential pandemic, but hadn’t actually implemented them. Experts have been urging populations to implement social-distancing measures to limit the spread of the highly contagious virus.

Easy Money

Global markets in turmoil and central banks rushing to arrest panic. But in China, the country most affected by the virus outbreak, it’s boom time for traders. A gauge of stocks in Shanghai and Shenzhen has jumped 14% in just over a month to close at a two-year high on Thursday. One exchange-traded fund focused on 5G amassed $2 billion in days as investors clamored to chase a rally in tech shares. Seeking to maximize returns, punters have driven stock leverage and daily turnover past 1 trillion yuan ($142 billion), both near four-year highs. Government bonds have surged too, with the 10-year yield approaching its lowest level since 2002. It’s a sharp turnaround from just a month ago, when the virus darkened factories across the nation, whole cities were isolated under quarantine and the stock market was hit by the most savage selling in years. The swift response from the Communist Party to arrest the spread of the disease has helped restore confidence as the number of new infections outside of the worst-hit province of Hubei has dropped.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

• India’s fast-rising fund CEO has her sights on $40 billion.
• The “nut rage” heiress is leading a coup to overthrow her younger CEO brother.
• Warren ends her campaign, but declines to immediately endorse.
• India’s up for sale as Modi offers national icons to plug the deficit
• WeWork’s dramatic fall should have deprived top executives at Jefferies their bonuses. It didn’t.
• How much can I withdraw from Yes Bank? India seizes the troubled bank and limits withdrawals.
• Odd Lots: How a profane subreddit moved the market.