Following more than a month of complacency, financial markets in the United States have finally awoken to the reality that the Covid-19 outbreak has a real potential to become a pandemic – if it is not one already, having spread beyond Asia to the Middle East, Europe and the Americas – and with new cases outside China, where the virus originated, already exceeding those within China.

After hitting new highs all the way to Feb 19 on the rosy assumption that the outbreak would be largely confined to Asia and would soon run its course, the benchmark S&P 500 has fallen sharply for the last week and is now back to where it was in early December. The tech-heavy Nasdaq has also given up all its year-to-date gains. US Treasury yields have sunk to new depths, oil prices have fallen to their lowest levels since January last year, while haven assets such as gold have risen.