The US Stock Market Appears Most Vulnerable to Virus Shock


The authorities have been struggling to contain the coronavirus that has broken out to more than thirty countries. Moreover, it has been threatening the global economy as well. Till the end of this week, the global stocks have faced declines for which the virus is accountable. In case if the virus is not contained, it is clear that some of the markets might be able to escape the harm.

The thing that remains unclear is which sock market will be facing more damages. Well, this is justifiable only if the crisis opens out. It concerns with the area of break out and the number of people affected. Moreover, these major concerns also include the trading routes and economy of the region. Additionally, it depends upon the degree of digestion of the potential risks by the market. And, as per the criterion, the stock market of the US looks unsafe.

In order to see the stock investors the most unworried, have a look at the NYSE FANG+ Index. There are ten companies on which most of the investors believe are found to be dominating their respective industries. The companies include Inc., Apple Inc., Google parent Alphabet Inc., Facebook Inc., Alibaba Group Holding Ltd., Baidu Inc., Twitter Inc., Tesla Inc., NVIDIA Corp., Netflix Inc.

Investors often value the revenue of FANG index comparatively more the profit. For FANG index, the price to sales ratio is 5.9. It is about 41 per cent higher than the P/S ratio of 4.2 of the growth index in March 2000. Considering FANGs, the market seems to have concerns regarding the risk associated with coronavirus.

The main reason why the US has been facing major issues is that the majority of the stocks are American companies. As per the FANG index, out of ten companies, eight of them are American. Stocks such as Russell 1000 index or S&P 500 index have their base on the market value.

In case if the virus becomes more of a serious problem to the global economy, the markets can be rethinking of the stock prices that include the companies in the FANG index. If the valuation is higher, the potential for the downward revision will also be great.

There are many discussions on whether the US disruptors are capable of navigating the risks with coronavirus not only for the investors of their own but also for those who are betting on the broad stock market of the US.


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