The coronavirus is still affecting share markets. Overnight the S&P 500 (INX) fell by 2% on infection worries.

It isn’t as though the infection numbers are still growing exponentially in the US in terms of the total number. New York is certainly over the worst of it, it was perhaps the main entry port of the virus into the US. But now it’s spreading across the country, so whilst the daily number is staying between 20,000 to 30,000 it’s decreasing in the original states and growing elsewhere.

Some in the US are keen to lift restrictions and get the economy going again. Overnight there was a particular warning that spooked US investors.

Dr Fauci, the boss of the National Institute of Allergy and Infectious Diseases, warned if restrictions are lifted too soon it could mean “suffering and death”. According to media reports, he said:

“It would almost turn the clock back rather than going forward. There is a real risk that you will trigger an outbreak that you may not be able to control, which in fact, paradoxically, will set you back, not only leading to some suffering and death that could be avoided but could even set you back on the road to get economic recovery.”

That’s the real danger. A second (and a third and so on) wave. The US hasn’t even gotten over the first wave yet. Will the US go into lockdown again? Will it just spread through the country relatively uncontrolled and cause the public’s confidence to spend to stay low?

It’s a tough situation in the US with different groups having different views.

How does the coronavirus affect the ASX share market?

Thankfully Australia’s infection numbers are incredibly low compared to many other countries. But our share market generally follows the US share market on a day to day basis. Some of the ASX’s biggest companies like CSL Limited (ASX: CSL) earn a large portion of earnings in the US.

If the US economy goes into lockdown again then it could cause much more economic damage. Not many households or businesses have many months of cash on hand. 

But it won’t be like this forever, the world will get through the coronavirus whether it disappears naturally or a treatment can be developed.

I’m going to keep investing during this period of volatility. Over the longer-term, things are more likely to work out than not.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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With the cash rate at the record low of 0.25% and tipped to remain at this level until at least the end of 2023, I think the share market remains the best place to earn a passive income.

Three top blue chip ASX dividend shares that I would buy for income are listed below. Here’s why I think they are great options right now:

Coles Group Ltd (ASX: COL)

I think this supermarket operator’s shares could be a good option for income investors because of its solid growth prospects and favourable dividend policy. In respect to its growth prospects, Coles look well-placed thanks to its cost reductions program, expansion opportunities, defensive qualities, and the return of rational competition. And with the company aiming to pay out between 80% and 90% of its earnings to shareholders, I estimate that its shares currently provide a fully franked forward 3.8% dividend.

Telstra Corporation Ltd (ASX: TLS)

Another option to consider buying for income is Telstra. I think Telstra is a great option due to its defensive qualities and improving outlook. In respect to its defensive qualities, these have been on display this year, with Telstra one of only a handful of companies that has been able to reaffirm its guidance. Looking further ahead, I believe Telstra’s outlook is greatly improved and a return to growth could be on the horizon. This is because the NBN headwind is easing and peak pain is expected to be reached within the next 18 months. In the meantime, I expect a dividend of 16 cents per share in FY 2020, which equates to a fully franked 5.2% dividend yield.

Wesfarmers Ltd (ASX: WES)

A final dividend share I would buy is Wesfarmers. I like the conglomerate due to its high quality portfolio, solid growth potential, and sizeable cash balance. The latter is likely to be used by the Bunnings and Kmart owner to add to its portfolio in the coming years and underpin further growth. For now, I estimate that Wesfarmers’ shares will provide a dividend yield of approximately 4% in FY 2021.

More reading

• Why high yield dividend shares can be detrimental to your wealth
• Is it time to buy ASX small caps for your portfolio?
• 3 ASX dividend kings to buy and hold forever
• UBS picks the real ASX winners from the COVID-19 grocery boom
• 3 safe and strong ASX dividend shares to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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