The following analysis aims to understand how financial markets have been reacting to the recent Covid-19 Outbreak. The analysis demonstrates how markets react more to government policy and consumer behaviour rather than the figures for Covid-19 cases.
By mid-February, China had experienced some 70,000 cases of Covid-19 and was in total lockdown. This did not have an effect on the global economy as this was China's problem and few measures had been introduced by foreign governments. Come the end of the month and numbers started to increase across the globe. Governments started to take drastic measures and markets started to be heavily impacted. The early signs were there, yet many decided to ignore them.