Redrick Terry:
It is now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. David, welcome back.

David Nelson:
Morning.

Redrick Terry:
Thanks for being here we always appreciate you being here.

David Nelson:
Thank you. Appreciate it.

Redrick Terry:
We’re obviously all aware of the ongoing coronavirus issue in China but recently some of the big technology companies have provided some guidance suggesting that they too will feel some type of economic impact from this.

Redrick Terry:
So how do you think this situation overall, has impacted the financial markets?

David Nelson:
It’s going to be really interesting. I mean this is a serious topic to say least and it’s certainly have an impact as you said, as far as we heard it from Apple as far as this past week as far as their announcement. The experts are saying this is going to dent the GDP as far as the global GDP by 0.2 to 0.3%. Doesn’t sound like much, but that’s big. That’s very significant as far as what could take place.

David Nelson:
The chart I brought today is going to kind of walk through as far as a nice visual, as far as to give people an understanding as far as what’s happened and what might be coming about. The lines here is very important. This is 2020, January, February. The line here is when the WHO, the World Health Organization, declared this a crises as far as with the coronavirus and so from that date as when it was announced, we had this pretty significant drop as far as in the Shanghai index, so the Chinese index. The blue is the United States. We came down a little bit or China dropped roughly 10%. The US dropped roughly 2% during that window.

David Nelson:
Now since that date took place, it’s basically rallied back to to where it was as far as pre the announcement here. In the US, we’re actually up 5%. Now all of this is ignoring the last couple of days as far as what’s taken place as far as in the markets. So again, it’s going to get more volatile.

David Nelson:
Now what’s confusing to most people as far as what’s taken place. So this is the events that have taken place. We’ve got 80,000 people that have contracted the virus. This is the market, the stock markets as far as US and China and on the bottom we have the bond market. What’s interesting about this is we have yields that have dropped, which basically is a bad indication as far as what’s happening going forward but yet stocks they’ve rallied.

David Nelson:
So one is going to be right, one’s going to be wrong and we’re going… Time will tell as far as, but we’re leaning towards the bond market. The bond markets, right, more than the stock market. Translation, this could be a big concern as far as going forward.

Redrick Terry:
Certainly we’ve got the US and China there but what about overall? Do you think this impact to be shared by more than just those countries?

David Nelson:
Yeah, as we’ve seen and we’ve got another slide here to walk through as far as showing some currencies as far as in Asia. But what we’ve seen over the last few days is the big announcement over in Italy. Italy has a huge outbreak as far as of the coronavirus as well.

David Nelson:
So what this is showing is the currencies as far as in Taiwan, this South Korea and China and again, the numbers aren’t that important, the trend line is. So the currencies as far as in Asia, are all suffering as far as what’s taken place and all indications are that this is definitely going to continue as far as with the currencies down in the US currency, the dollar being up during this period of time.

Redrick Terry:
So what should investors be thinking at this time?

David Nelson:
Well, I think the biggest thing is don’t make any emotional decisions.

David Nelson:
We always talk about that, the importance of keeping the emotions out of the decision making process but clearly it’s difficult during periods of stress like we’re in right now. People need to know what they own. So there’s been winners as far as in the stock market with through what’s taken place here. That would be primarily healthcare stocks.

David Nelson:
What we’ve seen as far as losers would certainly be in the category of technology, specifically semiconductors, which are produced in a big, big scale as far as over in Asia.

David Nelson:
So be careful as far as at periods of time like now, don’t make any emotional decisions, but at the end of the day, if you have heavy exposure as far as to some of the semiconductor stocks, et cetera, you might want to trim some of those holdings as far as going forward.

Redrick Terry:
Sound advice, as always.

Redrick Terry:
David, thanks for joining us.

David Nelson:
Thank you Redrick, appreciate it.

Redrick Terry:
If you missed any of our discussion, we’ll make it available to you in ourquadcities.com.