traderAP Photo/Richard Drew

  • Stocks dropped and bond yields fell on Friday as investors reacted to worrying estimates of coronavirus’ economic impacts.
  • The benchmark 10-year Treasury yield slumped to a record low of 0.74%.
  • “The bond market is scaring the raccoons out of the air ducts like crazy right now,” one analyst said.
  • The International Air Transport Association predicted a $63 billion to $113 billion hit to airlines’ passenger revenues this year, the Asian Development Bank warned global growth could slow by 0.4%, and S&P Global Ratings forecast that Asia-Pacific could grow at the slowest pace since 2008.
  • Visit Business Insider’s homepage for more stories.

Global stocks tanked and bond yields tumbled on Friday as investors scrambled to protect their portfolios from coronavirus. The flight to safety was fueled by fresh estimates of the epidemic’s potential economic fallout.

The yield on the benchmark 10-year Treasury — which dropped below 1% for the first time earlier this week — dropped to a record low of 0.74%. The 30-year Treasury yield also slid to 1.34%, another record low.

“The bond market is scaring the raccoons out of the air ducts like crazy right now,” Neil Wilson, chief market analyst for Markets.com, said in a morning note.

Coronavirus — which causes a disease called COVID-19 — has infected at least 95,000 people, killed more than 3,200, and spread to upwards of 80 countries. It continues to disrupt global supply chains, hammer consumer demand, and interfere with businesses around the world.

‘This is not a drill,” Dr Redros Adhanom Ghebreyesus, the World Health Organization’s director general, said during a media briefing on Thursday. “This is a time for pulling out all the stops.”

Trade bodies, developmental organizations, and ratings agencies weighed in on the economic impacts of coronavirus.

The International Air Transport Association predicted the outbreak could mean airlines miss out on $63 billion to $113 billion in passenger revenues this year. The Asian Development Bank warned it could slow global growth by up to 0.4%. S&P Global Ratings forecast 4% growth in Asia-Pacific, the region’s lowest level since the 2008 financial crisis, according to Reuters.

The worrying estimates come as investors weigh pledges of support from central banks and governments against the relentless spread of coronavirus. Stocks, bonds, oil, gold, and other assets whipsawed this week as sentiment shifted on a dime.

“No one can really explain why the markets behave the way they do, and what may be next,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a morning note.

Here’s the market roundup as of 10:35 a.m. in London (5:35 a.m. in New York):

  • European equities dropped, with Germany’s DAX down 3.9%, Britain’s FTSE 100 down 3.4%, and the Euro Stoxx 50 down 4%.
  • Asian indexes slumped. China’s Shanghai Composite fell 1.2%, Hong Kong’s Hang Seng fell 2.3%, Japan’s Nikkei fell 2.7%, and South Korea’s KOSPI fell 2.2%.
  • US stocks are set to open lower. Futures underlying the Dow Jones Industrial Average, the S&P 500 and the Nasdaq fell by 2.2% to 2.5%.
  • Oil prices tanked with West Texas Intermediate down 5% at about $43.50 a barrel and Brent crude down 5% at $47.40.
  • The benchmark 10-year Treasury yield fell below 0.75%.

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