Welcome to Thoughts in the Market.

I'm Andrew Sheets, Chief Cross Asset Strategy at Morgan Stanley.

Along with my colleagues, bring you a variety of perspectives, I'll be discussing trends

across the global investment landscape and how we put those different ideas together.

It's Thursday, February 27th at 2 p.m. in London.

This week markets have fallen sharply on concerns that the coronavirus will continue to spread and that this

spread will impact the global economy. Alert investors will have a mild sense of

deja vu. At the end of January concerns around the virus's spread and the impact

on growth also caused a market

sell-off which turned out to be relatively short-lived. The current episode has

been much more significant and raises key questions which we'll try to address in

order of difficulty. The first question is why now?

That feels most straightforward. From the end of January, markets had taken comfort that the level of

infections was appearing to level off and that countries might be implementing

additional stimulus measures to offset the economic impact.

Yet recently there have been a new round of cases across multiple countries while

additional stimulus has so far been pretty measured and

failed to boost economic data.

Both the spread of the virus and the lack of more material economic countermeasures to

offset its impact have worried markets.

The second question is, are markets currently overreacting?

This one's harder.

...