How the Coronavirus Could Impact Markets Next Week

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We've seen quite the rollercoaster ride in the markets this past week. Here's how the coronavirus could impact the markets over the weekend and into next week.

Kenny Polcari, senior market strategist at SlateStone Wealth joined TheStreet to discuss his thoughts on the coronavirus and its impact on the markets.

Full Transcript:

Katherine Ross: The coronavirus has caused quite the rollercoaster ride in the markets this week and many investors may start to feel the impact of the whiplash. Joining me today is Kenny Polcari, senior market strategist at SlateStone Wealth. Kenny, these moves in the market, it's starting to feel like an everyday occurrence.

Kenny Polcari: Well, it has been an everyday occurrence, right? For the last two and half weeks, where the market will move five, six, seven, a thousand points in either direction. The whiplash is happening and people are certainly already feeling it. I think what happens is it always feels worse when it happens on the way down versus on the way up. And so, I think, A, people have to put that in perspective. I also think that people have to put in perspective that, from the start of this year, the Dow is only off 8%. It's not the crash that everybody's making it out to be. The moves are so violent that maybe it feels like more of a crash. The Dow's down 8%. The S&P is down 6%. NASDAQ's only down, well going into this morning, it was down 3%. It's down probably another three today or down to two today. It's not the end of the world in the sense that people are... I hear some people comparing it to the crash of 2007, '08, and '09. It's nowhere near that. And so, people need to put that in perspective.

Katherine Ross: But, what about this weekend? What if we get a surge in new cases, especially in the US?

Kenny Polcari: And expect that's going to happen, because we're really the last country to get hit. It's gone all around the world and all of a sudden it's come here. Now, it's gone coast to coast. I fully expect it. I think people fully expect that we are going to get a surge of new cases, partly because more people are going to get tested, so therefore it's going to create that initial surge. You might get more people that are infected, especially in, some of the big cities. You've already seen in places like New York and Chicago, they started closing down schools and all stuff to contain it, which is really all good stuff. But, those moves are also creating hysteria amongst the people, when it shouldn't create the [inaudible 00:01:54]. People should be welcoming the fact that they're actually trying to contain it by closing schools and that stuff where a lot of it spread.

Katherine Ross: Do you think that we're going to see hysteria in the markets going into next week?

Kenny Polcari: I'd like to think that the market's cooler heads are going to prevail. I think what happens is it feels to me that it's becoming hysterical. When it becomes like that, there needs to be a real flush. You just need to shake the trees really hard and get a flush. Maybe that happens going into tonight. It's a Friday night, the weekend's coming, and maybe not. At some point, it's not going to really be over until they flush it, until they really shake the trees. Whether that happens next week or the week after, I think people should be prepared for that. I also then think that people should realize that that will create an opportunity for the longterm investor. Once again, the last thing you should be doing as a longterm investor with your 401k is be selling stocks in the middle of this chaos. Quite honestly, you should probably be sitting back and doing nothing at the moment until you get more clarity on where the market's going.

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