The market can’t make its mind up over the coronavirus. After closing at record levels last week, the three benchmark indexes slipped on Friday as optimism over the virus subsided. U.S. stocks climbed higher on Monday as investors worked out what to make of the latest developments.

Chinese officials reported 97 deaths on Sunday, a new daily record, diminishing hopes that the outbreak was stabilizing. However, a scientific model predicted the number of cases would peak in mid-to-late February.

Companies, economists, analysts and investors have been trying to count the cost of the full impact of the virus as it continues to spread.

In our call of the day, Goldman Sachs analysts said the economic impact will be limited and investors should look to cyclical and value stocks.

Goldman analysts said the virus would hit U.S. economic growth by up to 0.5 percentage points in the first quarter, but the drag would be recouped over the next two quarters and the global damage could be as low as 0.1 percentage points over the full year. “The impact of the lower global and U.S. economic activity on 2020 S&P 500 earnings per share will be limited,” they said.

“Investors who believe the economic consequences of the coronavirus will be limited should increase exposure to cyclicals and value stocks,” Goldman Sachs analysts, led by David Kostin, said in a note.

The bank’s sector-neutral dividend growth basket of 50 stocks has “declined sharply” alongside cyclicals and trades with depressed valuations.

“If fears of global pandemic are allayed, the basket should outperform,” they added.

The basket’s stocks set to outperform the most are semiconductor company Skyworks, IT services provider DXC, hotel and casino operator Wynn Resorts, technology company Broadcom, and manufacturer of construction equipment Caterpillar, the note said.

Goldman analysts said barring a “significant change” in circumstances, the impact of coronavirus on U.S. equities would be focused on a select group of companies most exposed to China — including restaurant owner Yum China and component manufacturer Qorvo. When it comes to sectors, airlines and gaming will be the most affected, due to travel restrictions and U.S. casinos operating in Macau — particularly as the Lunar New Year is the most lucrative time for gaming, it added.

The Tweet

Financial advisers have been sharing their tips on what to do about Tesla’s stock, which has surged 90% already this year. Shares rose 6% in early trading on Monday as the electric car maker resumed operations at its Shanghai plant following a temporary shutdown due to the coronavirus.

The Market

After the Dow Jones Industrial Average closed 277.26 points lower on Friday — following record finishes for all three benchmark indexes on Thursday — the trio edged slightly higher on Monday, with the S&P 500 rising 0.4% and the Nasdaq up 0.6%. European stocks were lower, following Asian markets, which slipped overnight as the coronavirus death toll rose above that of the Sars epidemic.

The Buzz

The coronavirus spread outside of China may only be the “tip of the iceberg,” the World Health Organization’s director-general warned on Sunday.

Volkswagen has postponed production at some of its plants in China over the spread of the coronavirus, the company said on Saturday. Saic Volkswagen — a joint venture between the German car maker and Saic Motor Corp — said production had been halted until Feb. 17 but production in Shanghai would restart on Monday.

“Parasite” became the first foreign language film to win best picture at the Oscars on Sunday night, beating competition from “1917” and “Once Upon a Time… In Hollywood.”

The price of bitcoin topped $10,000 on Sunday for the first time since September as the cryptocurrency’s 2020 rally continued. It dipped back below the milestone on Monday but remained 37% up year-to-date.

Fashion retailer L Brands is close to a deal to sell Victoria’s Secret to private-equity group Sycamore Partners, CNBC reported on Sunday.

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