Equities plunged across Europe and in New York, and the retreat could be the start of a long overdue reset of share valuations.

In terms of the countries with the next highest number of confirmed cases, there were 14 each in Japan and Thailand, 13 in Singapore and 11 in South Korea. Australian cases were listed as nine.
Outside of China, the WHO puts the confirmed cases at 106 across 19 countries.
“This does not feel like a reflexive 2 per cent-3 per cent drawdown that ‘needs to be bought’ but rather, this feels like the start of a broader correction,” Fundstrat Global’s Tom Lee said in a note.
“Hence, the character of the market is changing from the relentless buying since October, to one where we need to ‘wait for the initial bottom’ before becoming more aggressive.”
In New York, the Dow dropped 2.1 per cent. The S&P 500 fell 1.8 per cent and the Nasdaq shed 1.6 per cent. Each index pared some losses into the close.
The US listed shares of BHP fell 3.5 per cent, while those of Rio ended 3.2 per cent lower. Amazon resisted the retreat, rising 7.4 per cent on the day after reporting booming sales the previous evening.
“US equity markets are deep in the red for the second Friday in a row as it seems traders don’t want to remain long into the weekend due to the global coronavirus outbreak,” Bespoke Investment Group said in a note. “Last Friday we sold off, and then we sold off even more on Monday before finally bouncing on Tuesday.
“How stocks open this upcoming Monday depends on how much worse the spreading of the virus looks. This too shall pass — it’s just a matter of how long that takes.”
The yield on the US 10-year note slid 8 basis points to 1.51 per cent about 4.30pm New York time.
“Just as one source of uncertainty is fading, another is intensifying,” TD Securities said in a note, referring first to the US-China trade war and second to the coronavirus.
“Since China makes up close to a fifth of the global economy, the near-term slowdown will weigh on growth,” TD said. “Precisely how big that negative impact will be, will depend on the spread of the virus, the economic reach of impacted areas, as well as market sentiment and the evolution of financial conditions.”
The Chicago Board Options Exchange Volatility Index leapt 22 per cent to 18.84; its highest close since October 8.
Bank of Montreal chief economist Doug Porter said he cut his forecast for China growth to 4.5 per cent year over year for the first quarter and to 5 per cent for all of 2020; he previously had estimated a 5.9 per cent pace for both periods of time.
“Looks like we picked the wrong year to be even modestly bullish on global growth prospects,” Mr Porter also said.
Copper hit a five-month low on Friday as funds and traders sold on the expectation of slowing demand in China.
Federal Reserve vice chairman Richard Clarida struck a cautiously optimistic tone in a Bloomberg interview. He said the US economy was in a good place and he wasn’t concerned about the US Treasury yield curve because he saw its brief inversion this week as a sign of global uncertainty.
As for the coronavirus, Mr Clarida aligned himself with Fed chairman Jerome Powell’s comments earlier this week, saying it was a bit too early to assess its impact.
“It is a wildcard,” Mr Clarida said, adding it was too soon to tell the impact it would have on Chinese, global and US growth. “If this were resolved in say a one- or two-quarter slowdown in growth, that’s probably not something that changes the big picture, but I agree it’s a challenging situation, we’re going to keep on top of it.”
The Trump administration is taking a harder line.
The Trump administration on Friday declared a public health emergency over the coronavirus outbreak and said it would take the extraordinary step of barring entry to the United States of foreign nationals who have travelled to China.
Starting on Sunday, US citizens who have traveled to China’s Hubei Province within the last 14 days will be subject to a mandatory 14-day quarantine, Health and Human Services Secretary Alex Azar told a media briefing at the White House on Friday.
The administration will also limit flights from China to seven US airports, he said.
Centers for Disease Control and Prevention director Robert Redfield said there were six confirmed cases of coronavirus in the United States. He said there were 191 individuals under investigation for the disease.
Mr Redfield said the risk to the US public from the outbreak is low.
ASX futures down 119 points or 1.71 per cent to 6835 near 8.30am AEDT

• AUD -0.4% to 66.93 US cents
• On Wall St near 4pm: Dow -2.1% S&P 500 -1.8% Nasdaq -1.6%
• In New York: BHP -3.5% Rio -3.2% Atlassian -1.7%
• US techs: Amazon +7.4%, Apple -4.4%, Facebook -3.6%
• In Europe: Stoxx 50 -1.4% FTSE -1.3% CAC -1.1% DAX -1.3%
• Spot gold +0.7% to $US1585.43/oz
• Brent crude -0.3% to $US58.11 a barrel
• US oil -1.9% to $US51.16 a barrel
• LME aluminium -0.5% to $US1722 a tonne
• LME copper -0.4% to $US5567 a tonne

Among the latest tweets on markets:
Allianz’s Mohamed El-Erian said: “Yet more evidence today of the increasing sudden stop dynamics hitting #China’s #economy … and, with that, growing appreciation in #markets — though, IMO, still not yet sufficient in some segments — that this latest blow to global #growth will prove harder to reverse quickly.”
After the closing bell in New York, Mr El-Erian tweeted: “Dow/S&P down 2%, yields plummet (1.51% for the 10-yr and below 2% for 30-yr) and vol spikesleaving #investors with a tricky question: is this another buy-the-dip opp or is the economic shock hitting China big enough to break the FOMO conditioning.”
Canaccord Genuity’s Tony Dwyer: “We downgraded our view two weeks ago for the first time in years with the intention of putting offense back on the field as the market corrected and our indicators got to the required levels. The time to worry about downside was heading into excessive upside.”
Guggenheim Partners’ Scott Minerd: “Uncertainly around the #coronavirus, and past incidents like SARS in 2003, would seem to support 10-year note #yields returning to their lows around 1.3 percent.”
DoubleLine CEO Jeffrey Gundlach: “It took less than 2 days for the bond market to nullify the Feds were firmly on hold message this week. Now a 90% chance of a 2020 cut.”
Charles Schwab’s chief investment strategist Liz Ann Sonders: “Rates for giant Capesize shipswhich carry raw materials such as iron orehave collapsed (almost entirely) from September peak already-weak freight index has been dealt a huge blow due to #Coronavirus; underscores Chinas pull in global commodities.”