As reported by Breitbart News, “the Dow Jones Industrial Average was down 440 points, or 1.52 percent. The S&P 500 dropped 1.32 percent. The Nasdaq Composite fell 1.75 percent. The Russell 2000 index of smaller companies tumbled 1.7 percent.”
The markets appear to be reacting to news that Chinese government and health authorities are not adequately containing the virus, which originated in Wuhan, a centrally-located city of about 11 million people.
As of Monday, at least 81 persons are reported to have died from the illness and more than 2,900 have been infected, though some reports put that figure much higher.
The infection rate could very well get much higher. Breitbart noted that over the weekend, reports said that as many as 5 million people may have left Wuhan to travel for the Chinese Lunar New Year celebration, and it’s likely those people are going to spread out across the country, especially to China’s largest cities.
The city is now on lockdown, but reports claimed millions got out before Chinese authorities moved in to impose a quarantine and travel ban.
As such, the virus has spread much more quickly that it normally would have if Chinese authorities had moved in faster, critics have said.
What’s also concerning experts is that the virus can spread to new victims before they begin exhibiting any symptoms. That alone will make it much more difficult for health officials to detect the virus among travelers.
Past outbreaks like Ebola and SARS were more easily contained because health authorities were able to screen travelers for symptoms.
In addition to American markets, indexes in Europe were also down Monday. The FTSE 100 in London fell more than 2 percent, while the DAX, a prominent index for German and European companies, was off by 2.4 percent.
Japan’s Nikkei index, meanwhile, fell by about 2 percent, while markets throughout Asia — in China, Hong Kong, and South Korea — were closed for the Lunar New Year holiday.
‘Have all the risks been fully discounted?’
Breitbart News noted further:
Hotel and airline stocks plunged. Shares of Wynn Resorts, which has a big operation in Asia gambling capital Macau, fell 7.6 percent. Shares of Las Vegas Sands fell 6.2 percent. American Airlines shares were off 7 percent.
The price of oil fell on concerns that a slowdown in global travel and reduced economic activity in China could douse demand.
Also, the price of U.S. government bonds was up, which pushed yields down, forcing some investors to move money into so-called “safe haven” securities.
Charles Hugh Smith noted via the Of Two Minds blog that it’s possible the markets could be “grossly underestimating” the potential (negative) impact of the Coronavirus.
“Have all the risks been fully discounted?” he wrote Monday, claiming further that “there’s a tremendous reservoir of complacency about the economic and financial impact of the Coronavirus epidemic.”
Smith said “Patient One” — the very first person found to have the disease — was identified December 31. The reality is, the virus was already spreading for at least a month before that patient was diagnosed.
“The symptoms of this new virus are not that different from typical flu strains, so why would authorities spend the time and money searching for a novel flu in a patient? The only reason authorities become involved would be a cluster of flu/ pneumonia patients dying,” he wrote.
He also says the virus is of a new type not seen before, which “makes it especially dangerous as humanity may have limited immunity” to it. And because patients are displaying no symptoms for up to six days, “screening passengers for fever is essentially useless.”
As to the real number of infected, academics at the University of Hong Kong have put the figure at about 44,000 — far higher than the “official” number claimed by Beijing.
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