Market Review
The last week will make it into the hall of fame of financial history as one of the worst weeks on record. The first heavy drawdown started in the night from Sunday to Monday and led to worldwide losses of around 8%. After two calmer days this loss was overtaken on Thursday. Markets around the globe lost more than 10%. 
The events of the last weeks not only became historic, they even set new standards. Never before, the S&P 500 dropped 25% from a previous all-time high in such a short time. It took only 18 days. This event put the Wall Street panic of 1929 on second place. Not only that, it did so also with a big margin. In 1929 such a drawdown needed 39 days. I underline this, the Wall Street panic of 1929 is second placed. On a weekly basis most equity markets dropped by 10% to even more than 20%. Europe is among the worst performers, since it is heavily impacted by the coronavirus pandemic. WHO even declared Europe as the new epicenter of the coronavirus.

Coronavirus
The coronavirus pandemic has not only the potential to grow into a severe economic crisis of unforeseen scale, but also into a humanitarian crisis like the Spanish Flu of 1918-1920. Small side note, despite its name most scientists believe that the "Spanish Flu" had its origins in the USA. Currently, the rapidly growing number of infections in Europe as well as the even increasing growth rates could make the local health systems collapse. Thousands of people might be left to fate because of the shortage of medical personal and equipment. Europe has to put every effort to lower the growth rates. Hopefully the warmer spring and summer months bring some relief. A turning point would be reached if the growth rates come back quickly as it is currently the case in South Korea. Based on the current numbers, this situation has not been reached yet outside of Asia.

Risk Model Crash Protection
In the meantime, the Crash Protection risk models show a red status throughout all regions (Europe, Asia, America). The global status is neutral at the moment, and it is very likely that it will turn to red within the next days too. Historically, the biggest market drawdowns (with losses of -40% to even -90%) occured during periods of large economic crises. The slowdown of the global economic cycle leads to fear that such a crisis lies ahead of us. Actually, caution must be recommended. Now, capital protection is more important than gaining short-term profits. Because of the high market volatility, portfolio rebalancing should be spread over several days.



Important Note
Generally it is not recommendable to sell into a panic. The large losses caused by equity markets have evolved historically over several weeks or even months (see this analysis). Therefore it is not that important to avoid the next 10% losses of markets rather than the 50-60% which follow thereafter.
Rather than acting impulsive during a period of panic, a crisis strategy should be planned beforehand and executed systematically when the crisis takes place. Impulsive trading is very likely to cause losses.