Graycell Advisors

24 Feb 2020


Hello reader!

The fear of Coronavirus has infected the stock market.

The market's patience completely ran out today as the news on Coronavirus, which has continued to weigh heavily on the negative side, sent the market reeling. What alarmed the market was the spike in new patients in altogether new locations as the disease reached Italy in Europe and Iran in the Middle-East, beginning its rise to a potential global pandemic. Perhaps what was lost in the panic was the report from WHO that the infection rate has peaked in China and is now leveling-off. This can change, but for now, it's a sliver of positive news in a healthcare crisis that has not seen many positives thus far. While new countries are facing the crisis, if the disease rate in China now begins to reverse itself or decelerate, it can begin the process of unblocking choked supply lines for the world. China is a very meaningful cog in the global trade wheel and any progress there will be a positive.

After a very robust earnings season provided the market with strong support, the next best thing for the market now would be an indication by the Federal Reserve that it stands ready to support economic growth in the event of global trade disruption or if the virus makes broad inroads into the U.S. The situation reminds us of the US-China trade war when we had mentioned that the upside on trade war will be a Fed rate cut. The coronavirus can get the Fed to shift its posture to a more benign one from what it was just last week when the Vice-Chairman seemed reluctant to offer any hope for a rate cut this year. Any news of a change in the Federal Reserve posture will be a major positive.

Healthcare, including biotechs, were punished today, but not any more so than the broader market. In many ways, healthcare can turn out to be a defensive sector in the viral outbreak. However, the election-related risk remains but at this time it is not the primary concern.

Of course, these are uncertain times. In times of high volatility, it is common for sharp declines to be also accompanied by sharp rallies. While there has been a preponderance of negative news on the viral outbreak, any positive health news can go a long way in shoring-up market confidence. We are not making any portfolio adjustments today but will continue to monitor the market reaction closely.

For any questions, kindly contact us at

Graycell Advisors


Graycell Advisors, and its affiliates, officers, employees, families, and all other related parties, collectively referred to as ‘Graycell’ and/or ‘we,’ is a publisher of financial information, such as the Prudent Biotech and Smallcap newsletters. Historical performance figures provided are hypothetical and unaudited, and based on our proprietary analysis and system performance, back-tested over an extended period of time. The performance results obtained are intended for illustrative purposes only. Past performance is not indicative of future results, which may vary. All stock and related investments have a degree of risk, which can result in a significant or total loss. In addition, smallcap segment is characterized by much higher risk and volatility than the general stock market. The Information contained herein does not constitute a personal recommendation or takes into account the particular investment objectives, financial situations, or needs of individual investors. If you decide to invest in any of the stocks of the companies mentioned in the newsletters, samples, alerts, etc., sent to you or available on our websites, you can and may lose some or all of your investment. You alone are responsible for your own investment decisions. We are not liable nor do we assume any responsibility for losses incurred as a result of any information provided or not provided or not made available in a timely manner, herein or on our website or using any other medium.  We also cannot guarantee the accuracy and completeness of any information furnished by us. Graycell is not a registered investment advisor and nothing contained in any materials should be construed as a recommendation to buy or sell securities. We may or may not already have existing positions in the stocks mentioned in our reports. Our models are proprietary and/or licensed and can be changed or revised based on our discretion at any time without any notification. Subscribers and investors should always conduct their own due diligence with any potential investment and consider obtaining professional advice before making an investment decision.