(New York)

Stock across the developed world went into freefall today as news spread of the explosion of the coronavirus in Europe and the subsequent quarantine that has been put in place in Northern Italy. Additionally, US data shows business activity contracted for the first time in four years in February. The S&P 500 and Dow are both down about 3.4% at the time of writing.

FINSUM: The virus is now no longer contained to China, with Italy sporting 150 cases and three deaths. Chip companies, travel and tech are getting hit the hardest.

(Washington)

The terrible, no-good, hated first version of the DOL Rule could be on its way back. While most advisors are aware that many of the Democratic candidates want to bring back the old version of the rule, one big surprise came out this week—even Mike Bloomberg explicitly says he wants the rule reinstated. That comes as a bit of a shock because he is seen as the most moderate candidate (he was a Republican while mayor of NYC!).

FINSUM: There is a huge amount on the line for the wealth management industry in this upcoming election. Not only will taxes likely change drastically, but the regulatory environment may shift radically.

(New York)

Fixed index annuities can be an ideal investment if you are looking for a mix of upside gain and downside protection. Many annuities in this category allow a range of choices that mean investors can get much of the upside of an index and still combine it will downside protection. A couple good examples include Lincoln National’s OptiBlend 5 and Delaware Life Insurance Company’s Retirement Stages 7 Fixed Index Annuity. For instance, Lincoln’s offering allows investors to choose exposure to the S&P 500 or the Fidelity AIM Dividend Index and holders can change their allocation each year. Holders can receive a percentage portion of the upside of each index (i.e. up to 35% from the S&P 500 and up to 89% of the AIM Dividend Index).

FINSUM: FIAs can provide a nice mix of benefits and peace of mind, but it is key to remember that the cost of that protection can be quite high.

(San Francisco)

It isn’t just Apple that is at risk from coronavirus. A lot of other tech companies are too, and it makes perfect sense. Apple is far from the only major US tech company that sources many of its parts from China and relies on the country for a significant portion of revenue. The other major companies which are highly exposed are Tesla (20% of its supply and demand comes from China), Dell, HP, and Corning (which looks especially vulnerable).

FINSUM: Corning has a major glass factory in Wuhan itself and relies on China for 25% of its revenue.

(San Francisco)

In many ways the coronavirus just became real for stock markets. Up to this point, fears about how the virus might impact the economy and stocks seemed esoteric and intangible. Then this happened: Apple warned that it would miss its quarterly revenue target because of coronavirus. It is having trouble producing phones because of unstaffed Chinese factories. Accordingly, the company announced “iPhone supply shortages will temporarily affect revenues worldwide”.

FINSUM: This is when the rubber meets the road and it becomes much easier to see how this virus could cause a global recession. The engine of the world (China) is sputtering.