Chart of the Day - Thursday, January 23rd, 2020

Today’s Chart of the Day was shared on Twitter by Iossif Vodenitcharov (@iv_technicals). The chart shows the MSCI World Index over the past 50 years with black dots marking some of the worst global health epidemics during this period. The table on the left breaks down the one, three, and six month returns following each outbreak. There's been a lot of concern this week over the coronavirus outbreak and how it will impact stocks. Some suggest that it will be the lynchpin in the bull market or at least cause a short-term sell-off. As you can see from the table, the average returns following these outbreaks are actually positive across all three time frames. The MSCI World Index gained 21.51% in the six months following the SARS outbreak in 2003, and nearly 40% in the six months following the Swine Flu outbreak in 2009. Perhaps this time will be different, but for now, the coronavirus appears to be just another brick in the wall of worry.