The market's reaction to the coronavirus doesn't make sense because 'irrational exuberance never makes sense,' the former Morgan Stanley Asia chairman told CNBC.
posted record highs Wednesday. The S&P 500 is up 4.8% so far this year, while the tech-heavy Nasdaq is up 9.4%.
Roach said the markets continued move to the upside despite coronavirus uncertainty does not make sense because "irrational exuberance never makes sense." "As long as central banks are opening up the liquidity spigot as wide as they are, the markets pay absolutely no attention to any potential threats to economic activity," Roach said. "It's the here and now, and it works until it doesn't."
Roach said the coronavirus outbreak carries increased financial risk due to the state of the global economy entering 2020. He previously pointed to the IMF's estimate of 2.9% global growth in 2019, writing in a piece for Yale that it hadAnd since the I
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