There is no denying the psychological impact that the word “pandemic” can have on investors globally, especially when it is followed by headlines containing the words “global recession".

The well-publicized fall in equity markets may have overshadowed a potentially much more impactful risk from the corporate bond market – that of fallen angels.

Last year we introduced the Qontigo ROOF Scores as a market sentiment indicator. Recently, it occurred to us that a similar indicator could be derived using sectors.

The US market has been broadly aligned with investor sentiment since early October. Then, news of the coronavirus outbreak in China hit the front pages.

As both cases and news about the coronavirus are spreading fast across the world, many investors are asking how they can prepare for the impact of a possible wider outbreak.