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The top-story for the week is the now global transmission of the Ebola virus, with the first recorded case of an infection occurring within American borders having been confirmed by the Centers for Disease Control. The news sent ripple effects throughout various media outlets, and was responsible for a substantial downturn in U.S. equity valuations.
On Wednesday, the major indices dropped more than one percent, with the airlines and transportation sectors taking the brunt of the damage. The New York Stock Exchange’s ARCA Airline index fell 3.1-percent, the biggest single-day decline since January of this year. The Dow Jones transportation average gave up 2.5-percent of valuation, which was its biggest daily percentage drop since February.
Bearish speculation overcame the personal transport industry when the CDC confirmed that the Ebola patient was initially infected in Liberia, which is the hardest-hit country suffering from the West African epidemic. The government agency went on to emphasize and reassure millions of Americans that Ebola can only be spread through close contact with the bodily fluids of someone who is exhibiting symptoms, which include fever, vomiting and diarrhea.
Medical experts have come on the air explaining that the patient could not have spread the disease on the flights he was traveling because he had not yet exhibited symptoms. The CDC has stated that there was no need to monitor any of the passengers on the flights in question, and no further information regarding the flights were revealed.
Taking Unsafe Liberties with Information
Unfortunately, the government is taking unsafe liberties with the information at hand, and the reluctance by the CDC in not taking aggressive action regarding potential air-travel transmission is grossly negligent. On July 27th of this year, Newsmax issued an article noting that Nigerian health authorities were racing around the clock to stop their own epidemic when an airline passenger brought the virus to Lagos, Africa’s largest city with 21 million people. As with the American incident, the traveler was infected in Liberia and although he showed no symptoms while boarding the plane, by the time he had arrived in Nigeria, the symptoms were plainly evident.
Sense of Complacency
Perhaps many people have been lulled into a sense of complacency that Ebola is an “African problem,” but the obvious gaps in travel safety highlights the enormous risks of a super-bug devolving into a worldwide pandemic. In the Hollywood thriller Contagion, a corporate executive on overseas business travel became infected with an airborne virus. Upon arriving at her home stateside, she immediately succumbed to her illness and set off a rapid chain of deadly events. The rest of the film focuses in on the efforts of the CDC as they race for a vaccination.
While some of the scientific scenarios were exaggerated for dramatic effect, the main thesis of the movie is nothing short of terrifyingly accurate. As recent market activity has demonstrated, the mere potentiality of a biological plague has wreaked enormous volatility. Just imagine what a real pandemic would cause…
In financial news, the equities sector managed to pare losses on Thursday, temporarily halting bearish momentum from earlier trades. The S&P 500 held dead-even against the prior day’s close, at 1,946 points, while the Dow shed only 4 points, finishing the session at 16,801.
The precious metals complex continued their slide, with gold gaining only a dollar to close at 1,215, while silver is desperately clinging to the 17 dollar level. Palladium was again one of the worst hit metals, closing below 800 at 770 on the ask. All eyes are on the upcoming jobs report as traders hold off on making major decisions. In digital currencies, bitcoin suffered a series of major setbacks throughout the week, which on last count was trading hands at 379 dollars.