Welcome to Thoughts on the Market.

I'm Mike Wilson, Chief Investment Officer and Chief U.S. Equity

strategist for Morgan Stanley.

On this special episode of Thoughts on the Market, I'll be talking about the impact of the

coronavirus outbreak

and share some perspective on how investors should be thinking about

global markets during a period of some uncertainty. It's Wednesday February 26 at

1 p.m. Eastern so let's get after it. It's Wednesday, February 26 at 1 PM Eastern.

So let's get after it.

Over the past few days, financial markets have definitely taken a sharp turn downward.

The culprit, of course, is growing concern about the coronavirus outbreak which began in China last month

and has now spread to other countries, most notably South Korea, Japan, and Italy.

The CDC in the US yesterday then announced that the general public should be prepared for a similar outbreak to occur in the United States.

This is not to say that they expect it to happen, but that we should be prepared for it.

This fueled further selling selling leaving major equity indices

almost 10% below recent all-time highs.

My take on the situation is the following.

First, equity markets have had a tremendous rally over the past year

and we were due for some kind of a pullback even before the coronavirus outbreak.

Oftentimes, over-bought equity markets are looking for a reason to correct and the coronavirus has presented a pretty good one.

Second, much of the rally since the fall has been driven by extraordinary liquidity conditions

provided by the Fed and other central banks.

...