World Vol.10 (#CoronaVirus – impact on global economy)

The below excerpts are on our own.

Coronavirus is fast becoming an ‘economic pandemic’ (w Video; 02/24/2020) | @CNN
The International Air Transport Association, for example, warned last week that coronavirus could cost global carriers nearly $30 billion in lost revenue. Global demand would drop by 4.7%, the first decline since the financial crisis.
The group’s estimate was based, however, on the disruption caused by SARS when it ripped through China in 2003. That virus caused real economic damage over a period of months, including for airlines, but the sharp decline in activity was “followed by an equally quick recovery,” according to IATA.
“We don’t yet know exactly how the [current] outbreak will develop and whether it will follow the same profile as SARS or not,” IATA warned. …

Economy Faces a Coronavirus Challenge as Markets Swoon: Central bankers and administration officials alike are unsure how the virus will affect American economic growth. (02/24/2020) | @nytimes
Markets on Monday had priced in a 75 percent chance of a rate cut as of the Fed’s June meeting, based on a CME Group tracker. The chance of a move that soon was priced at less than 50 percent a week ago.
The outbreaks in Italy and South Korea suggest that the virus “may be on the brink of morphing into a global pandemic,” Krishna Guha at Evercore ISI wrote in a note to clients, announcing that he and his colleagues had raised their estimate of the probability of a Fed rate cut this year to 45 percent. …
“It’s hard to try to figure out how to be pre-emptive in a set of issues that have to do with health issues, but which then may go into supply chains,” Roger Ferguson, a former Fed vice chairman who is now the chief executive at TIAA…
“The question for us really is: What will be the effects on the U.S. economy? Will they be persistent? Will they be material?” Jerome H. Powell…

Fear that the coronavirus will turn into a global economic pandemic is building:Stock-market plunge on Monday highlights angst over the failure to halt the virus’s spread (02/24/2020) | @MarketWatch
Near-panic over a spreading coronavirus sheared more than 1,000 points off the Dow Jones Industrial Average DJIA, -3.56% on Monday, with more and more companies having followed in Apple’s AAPL, -4.75% footsteps by warning of lower sales and supply disruptions…
The U.S. economy has been shielded from direct impacts of the virus, but the side effects are becoming more evident each day. Declining travel. Fewer foreign tourists. Supply bottlenecks for automobile makers and tech companies. The closure in China of popular American retail chain stores such as Starbucks SBUX, -3.25% and McDonald’s MCD, -1.09%…
… The globe hasn’t suffered from a true pandemic since the Spanish flu in 1918 swept the world and killed up to an estimated 100 million people. …
The U.S. would seem to be more immune from the baleful effects of the virus because it relies far more heavily on economic activity inside the country than other rich nations. …

Fear of coronavirus, rather than virus itself, hits economies (25/02/2020) | @livemint,@WSJ
The body’s immune response to infection is often more painful than the infection itself. The same is true of epidemics and the economy.
As with terrorist attacks and financial crises, epidemics generate widespread uncertainty and sometimes panic. Government authorities and private individuals often respond by drastically reducing exposure to the shock, amplifying its global economic impact.
The stock market’s steep drop on Monday reflected fears that as the coronavirus spreads to other countries, the reaction may be as draconian as it has been in China. …
… Tom Inglesby, director of the Center for Health Security at Johns Hopkins University. …
Lawrence Gostin, director of the O’Neill Institute for National and Global Health Law at Georgetown University…
Goldman Sachs, for example, projects a 0.8 percentage point hit to U.S. annualized growth in the current quarter from reduced tourism, exports and supply chain disruptions, with most of that reversed by year-end. But “risks…are skewed towards a larger hit because a change in the news flow could lead to increased risk aversion—less travel, commuting or shopping.”…
Peter Berezin, chief global strategist at BCA Research…

If the virus infected a billion people, as the swine flu did in 2009 and 2010, 20 million could die… Dow drops more than 1,000 as coronavirus outbreak threatens the economy (w Video; 02/24/2020) | @fox8news,@AP
The Dow fell 833 points, or 2.9%, to 28,158 as of 3:15 p.m. Eastern time. At its low point, it lost 1,079 points. The S&P 500 index skidded 91 points, or 2.8%, to 3,245. The Nasdaq dropped 292 points, or 3.1%, to 9,283.
Germany’s DAX slid 4% and Italy’s benchmark index dropped 5.4%. South Korea’s Kospi shed 3.9% and markets in Asia fell broadly. …
U.S. government bonds are seen as some of the safest possible investments, and investors have been piling into them throughout 2020, even as stocks overcame stumbles to set more record highs. A bond’s yield falls when its price rises, and the 10-year Treasury has been in such demand that its yield has plunged to 1.38% from roughly 1.90% at the start of the year.
The 10-year yield on Monday touched its lowest point in three years, falling from 1.47% late Friday, and it was near its intraday record low of 1.325% set in July 2016, according to Tradeweb. The 30-year Treasury yield fell further after setting its own record low, down to 1.84% from 1.92% late Friday.
Traders are increasingly certain that the Federal Reserve will cut interest rates at least once in 2020 to help prop up the economy. They’re pricing in a nearly 95% probability of a cut this year, according to CME Group. A month ago, they saw only a 68% probability. …

Dow closes down 1,000 points as coronavirus fears slam Wall Street: All three major indices plummeted Monday as fears grew that the epidemic would begin to choke supply chains worldwide. (w Video; 02/24/2020) | @NBCNews
The market sell-off came amid a significant uptick in reported cases of the disease in Europe, pushing investors to ditch stocks and buy up safe-haven assets like gold, which hit a seven-year high.
The virus has already stalled the travel industry and shuttered factories in several countries, and it has slammed luxury goods retailers, casino operators and tech companies. …
… The Borsa Italiana, Italy’s stock exchange, slid by 6 percent, its worst day in almost four years. …

Stocks plunge on slowing growth, coronavirus fears: Dow plunges 600 points, leading all three major U.S. indexes in steep fall (02/01/2020) | @washingtonpost
Ivan Feinseth of Tigress Financial partners views the scare as a potential opportunity for investors.
“History has shown that any selloffs in stocks driven by health scares have been short-lived and did little to change the upward ascent of stocks in the past,” Feinseth said. “The S&P 500 gained 31 percent in 1997 even in the face of a combination of the Avian flu epidemic, the Asian financial crisis, the Russian sovereign debt default, and the collapse of Long-Term Capital Management.”…
Coronavirus: How Fast to 100,000 Infected? (01/30/2020) | @nasdaq
Illumina, Inovio, Moderna, Novavax; NVIDIA …
How Coronavirus Affects the Economy (02/24/2020) | @NRO
U.S. stock indexes are down roughly 3 percent today…
Information uncertainty. China’s leadership has been sending mixed messages…

Coronavirus: The Global Economic Threat (PDF; 02/02/2020) | @MoodysAnalytics
…the disruption caused by the coronavirus will cut more than 2 percentage points from Chinese real GDP growth at an annualized rate in the first quarter of this year and 0.8 percentage point from growth for all of 2020 (although this may not show up in official GDP statistics from China). U.S. real GDP growth will be reduced by 0.45 percentage point at an annualized rate in the first quarter and 0.15 percentage point for the year. …
… Research published by the Brookings Institution using another model of the Asian economy estimated that SARS cost the Chinese economy close to 1 percentage point in real GDP in 2003. Hong Kong’s economy was hit even harder. …

How the coronavirus could affect the products you see – or don’t – in stores (02/24/2020) | @USATODAYmoney
While many Chinese factories are shuttered and Chinese consumer demand is slack, U.S. exports to China will suffer, including computer chips, plant equipment and aircraft, Zandi says. The Trump administration’s Phase 1 trade deal with China calls for $200 billion in additional U.S. shipments to that country – a target that some analysts viewed as a stretch. The outbreak further reduces the odds of reaching that goal. …

Coronavirus: Just a body blow, or a black swan for the economy? (02/23/2020) | @PhillyInquirer
Coronavirus travel barriers, business closures can harm the world economy: experts (w Video; 02/02/2020) | @globalnews,@AP
Coronavirus in China: How the outbreak could impact investors (w Video; 01/23/2020) | @CBSNews
China’s coronavirus impact on the economy (28/01/2020) | @ING_Economics
SEC Warns Investors of Coronavirus Investment Scams (02/10/2020) | @FinAd_IQ
Coronavirus: Implications for Investors (29/01/2020) | @AmundiPioneer
How coronavirus fears could impact your investment portfolio (w Video; 02/02/2020) | @CBCNews
How Virus Impact Has Altered Investment Calls Around the World (w Video; 02/06/2020) | @markets
The coronavirus outbreak and your portfolio (02/07/2020) | @Jerusalem_Post
Zoom Stock Climbs On Coronavirus Spread, With Earnings Due Next Week (02/24/2020) | @IBDinvestors
3 Smart Ways to Invest While Coronavirus Fears Spike: Heading to the sidelines would be a regrettable decision. (02/06/2020) | @themotleyfool
These Investment Opportunities Stem From the Deadly Coronavirus Outbreak (w Video; 01/28/2020) | @cheddar