Stocks are surging in part because investors expect a central bank response to the coronavirus

"For the year as a whole, this would imply a modest hit to annual-average global GDP growth of 0.1-0.2pp but still allow for a slight reacceleration from 3.1% in 2019 to 3¼% in 2020."Hogan said the fed funds futures market is responding to concerns that the hit to China could be bigger than expected, and spill over to the U.S. After an initial plunge of nearly 8% on Monday, the Shanghai market steadied and was up 1.3% Tuesday and higher by another 1.3% Wednesday.Analysts say stocks were also helped by the fact that there was no clear front runner in the Iowa Democratic caucuses Monday, and the progressive candidate, Vermont Sen. Bernie Sanders, came in second behind Pete Buttigieg."To me, the market seems to be more driven by liquidity than anything about the coronavirus … but it's also like we saw with the U.S. confrontation with Iran," said Marc Chandler, chief market strategist at Bannockburn Global Forex. "The markets tend to exaggerate non-economic variables, and what I think the markets have decided is that Asia is going to be hit hardest because of its ties with China."He said, for instance, Korean car companies Kia and Hyundai are having problems already getting parts from China, and those types of impacts could increase.Analysts said while the worst may not be over, there are expectations that Chinese authorities are taking every step to stop the spread of the virus."A lot of this stuff comes back to the idea that if you can show the market is under control, and you've got some containment going on, and we don't sees it spreading out of control, to me that's the key to restoring confidence in this market," said Jack Janasiewicz, portfolio manager with Natixis Investment Managers Solution.Hogan said there has been no all-clear on the virus, which has infected about 25,000 individuals, mostly in China. Hogan said the market is awaiting signals that the virus has peaked, and that will remove some of the concern but when that might happen is impossible to tell.So far, economists are not expecting much damage to the U.S. economy, and models show a rebound by second and third quarter.Chandler said many central banks are not likely to cut, but the Chinese central bank will continue to move."China later this month will for sure.