Frequently Asked Questions: Coronavirus and Markets

In order to help clients navigate the extreme market volatility related to the coronavirus pandemic, we’ve put together the list of FAQs below. Check back often as this list will be updated. For more information and assistance, please contact your Azzad advisor at 888.86.AZZAD. We will continue to monitor developments of COVID-19 and its impacts as information becomes available. We advise clients to stay patient and stick to their strategic asset allocation. Thank you for your continued trust and investment. Q: What options are available to small business owners who want to retain their employees but need temporary help? A: Many of our clients are small business owners, and some are searching for answers in this difficult time. Current economic conditions have adversely affected financial performance, and managers being forced to make some hard decisions. First, try to avoid panicked moves, like layoffs, until you’ve considered options to help control costs. Even a temporary reduction in employees’ salaries is a better option than letting people go–both for you and them. As for government aid, Congress is taking steps to alleviate the suffering of small businesses. There are three phases of coronavirus-related relief legislation, two of which have been signed into

March 18, 2020 1 Comment

Coronavirus infects financial markets

Recent news about the coronavirus outbreak is tragic, with unimaginable and unmeasurable implications for the many affected. As we attempt to discern incoming economic data, our goal is not to diminish the harsh realities faced by those affected, but to keep in mind that there are economic impacts on investors and to make sense of a market environment that reacts in real time to public health emergencies. What’s happening? Global equity markets sold off sharply today following reports over the weekend that coronavirus infections are spreading outside of China at an alarming rate. The global demand shock will be hard to quantify for some time as the scope of the social and economic impacts in affected countries remains fluid. Governments are trying to balance the need to provide the public with information against the risk of causing panic. We are observing confusion among governments and policymakers, which is spurring risk-off behavior among investors. Yesterday, U.S. Treasury Secretary Steven Mnuchin told reporters that policymakers would explore options to respond to coronavirus. We think elevated levels of two-way volatility will follow today’s initial reaction to the spreading of the virus. Therefore, we caution investors against reacting to these acute price moves. Bigger

February 25, 2020 No Comments

Coronavirus fears are not a reason to sell in this market

Last week, global markets added the word “coronavirus” to their collective vocabulary. And with that, the calm that had settled over financial markets in recent months was shattered. Emerging markets and Asian equities bore the brunt of the blast, while in the United States, concerns about the virus were evident on Wall Street on Friday, with the S&P 500 down about 1%, its worst drop since October. Markets were supposed to come back down to earth after a more than 30% rise in 2019, but the arrival of the coronavirus has added a layer of unforeseen complexity. Irrational fears can move markets sometimes violently, and that leaves investors wondering if it’s a good idea to simply hunker down and wait out the storm. So, should they? Yes, and here’s why. Based on past incidents like the SARS outbreak of 2003, the virus isn’t likely to be more than a one-time event. While specific industries will probably take a big near-term hit from these worries–think shares of airlines, casinos, and other companies with exposure to China–the coronavirus doesn’t seem to have the staying power to move markets for more than a short period. In the U.S., the S&P 500 was already

January 27, 2020 No Comments