Markets Are Waking Up to the Virus Reality
Mining stocks offer a window into the gap between investors’ perceptions and the reality of the economic hit.
Stimulus hope versus stockpiles reality.
Photographer: STR/AFP/Getty Images
Sharp falls in Asian markets and U.S. stock futures Monday suggest investors are starting to catch up to the disconnect between the coronavirus’s widening impact and hopes of a V-shaped recovery.
It’s a gap that has been particularly visible in metals. China, where much of the economy remains in lockdown, accounts for about half the world’s appetite for materials from iron ore to copper. That makes the sector highly vulnerable to a coronavirus-induced slowdown, and a helpful gauge of how well the reality of economic activity is being reflected in financial markets. The answer? Not enough.