Wall Street is wondering if the Fed can heal a coronavirus-stricken stock market that just saw $4.3 trillion in value vanish over the past 7 sessions

: Category: Economics; Published: 01 March 2020

A historic week for the stock market ended with a big, fat question: What will the government and the Federal Reserve do about the coronavirus outbreak that threatens to decimate the longest-running bull market on record?

The infectious disease, COVID-19, which reportedly originated in Wuhan, China, late last year, reached viral proportions this week on Wall Street — and literally throughout the world.

Cases of the illness have stabilized in China, but its spread outside the country, to nearly 60 countries in total, is what may have truly injected uneasiness into markets — see FactSet chart: ...

Approximately 84,000 cases have emerged ^[1], and almost 2,900 people have died, with several countries reporting their first incidences of COVID-19, including Brazil, Georgia, New Zealand and Norway. The U.S. on Saturday reported its first death ^[2], in Washington state.In an opinion piece in the New England Journal of Medicine on Friday, Microsoft co-founder Bill Gates said the outbreak could be a once-in-a-century pandemic ^[3]. “The data so far suggest that the virus has a case fatality risk around 1%; this rate would make it many times more severe than typical seasonal influenza, putting it somewhere between the 1957 influenza pandemic (0.6%) and the 1918 influenza pandemic (2%),” he wrote, adding that the Bill and Melinda Gates Foundation has committed substantial resources to prevent such diseases. Check out: How the stock market has performed during past viral outbreaks, as coronavirus spreads to Italy and Iran ^[4] Those factors have, perhaps, sent risk assets into virtual free fall this week after mostly shaking off developments related to the virus since at the start of the year. The structural damage to Wall Street’s bullish patina is undeniable, as the Dow Jones Industrial Average DJIA, -1.39%^[5], the S&P 500 SPX, -0.82%^[6] and the Nasdaq Composite COMP, +0.01%^[7] booked their worst weekly declines since the 2008 financial crisis. All three stock gauges fell into correction territory with drops of at least 10% from recent peaks.Those statistics don’t necessarily capture the severity and velocity of the move in stocks, which had only days before been putting in all-time highs. Indeed, the deterioration from the peak has been nothing short of breathtaking, highlighted by the S&P 500’s fastest slide from a record close to correction in history ^[8]. All totaled, global equity markets have wiped out $7 trillion from the levels of Feb. 19, when the S&P 500 notched its record,