There’s been a lot of fear that the scary coronavirus, or COVID-19, would shake the financial world like SARS did back in 2003. So far, that hasn’t been the case and there are more analyses of what coronavirus might do than actual market impacts. There are, however, still a lot of unknowns. Federal Reserve chair Jerome Powell has been exceptionally cautious about the outbreak and what it might do, telling the House Financial Services Committee, "We are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy."

European markets, which are somewhat weak already, could be pushed into a recession, according to some analysts, as many factories and business that supply European economies remain shuttered. If that happens, there could be ripples that reach the U.S. markets. But that’s a lot of "what ifs." There will very likely be some specific franchise sector impacts, as research firm Cowen explored.

Hotels are already facing some extreme slowdowns as not many people want to travel to outbreak zones. Analysts at Cowen found some lessons from the SARS outbreak.

"At its peak in May 2003, SARS devastated travel in affected regions, with air tickets and hotel stays down 80-90 percent year-over-year. We expect the new outbreak to have a similar impact," wrote Cowen analyst Kevin Kopelman. He noted that traffic resumed after three to four months.

The handful of large restaurant companies with exposure to China are already seeing effects, namely Starbucks, Yum Brands and McDonald’s. All have closed hundreds of locations amid the outbreak. Yum has the largest exposure, with China accounting for about 5 percent of revenue. It closed 30 percent of Chinese locations.

"We estimate this will have an impact on YUM Brands 1Q20 EPS of $0.07," wrote analyst Andrew Charles.

McDonald’s closed 10 percent of Chinese locations, essentially an entire licensed market. But that would not likely "have a material impact to EPS, even when accounting for MCD’s 20 percent equity stake in China and Hong Kong," wrote Charles.

To be clear, traffic and sales in China are dismal and the populus is suffering, but until those potential ripples are realized, investors should see a healthy market. Just keep washing your hands.

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