It seems that the Asian market went down because of the “health reasons” The number of people who seems to be infected has been tripled during the three days over the weekend. It all started in the province of Wuhan and then went on to the other major cities.
The problem is that millions of Chinese people are preparing to travel on January 25 for the Chinese New Year. Be it as it may, newly found China’s coronavirus could disrupt the tourism. The worst thing is that these geopolitical problems could eventually slow down economic growth. In the times of the economic uncertainty, as is today, the Asian stocks are hit hard, copper was at the time of writing down 0,10% and selling $6,263 while the Brent prices were down 0.90% to $63.77 and WTI was down 0,72% to $58.29.
Wall Street’s big investors and analysts said that the virus, which seems to be spread from seafood or meat at a Wuhan food market. Jiangsu Sihuan Bioengineering, Shandong Lukang Pharmaceutical, and Hengrui Medicine were among the drug makers that gained 10%.
But let’s start from the beginning. SARS, or severe acute respiratory syndrome, is the disease caused by SARS coronavirus. By the Wikipedia “it causes an often severe illness marked initially by systemic symptoms of muscle pain, headache, and fever, followed in 2–14 days by the onset of respiratory symptoms, mainly cough, dyspnea, and pneumonia.”
Be it as it may this became a major theme of the World Economic Forum in Davos, Switzerland. An investor Paul Tudor Jones told to CNBC:
“We’ve got a curveball with this coronavirus. I think that’s a big deal. If you look at what happened in 2003, estimates ranged 0.5% to 2% in GDP for China, half a percent for Southeast Asia. Stock markets sold off double digits. If you look at the escalation of the reported cases, it feels a lot like that.”
After Americans discovered the problem with the coronavirus stocks immediately came lower. The greatest problem was with the traveler who came to Seattle and was diagnosed with the virus. Immediately the treasury yields moved to their maximum low and the 10-year touched 1.76%. Yields move the opposite price.
Speaking with the doctors, they say that the coronavirus is not as lethal as SARS in the early stage. However, let us remember that SARS exactly killed approximately 10% of the patients.
From China, there was news that the virus was now being conducted between humans. This is the reason why it is becoming a mass epidemic. As per the official announcement, “the coronavirus infection can create respiratory problems, coughing, fever and in more severe cases pneumonia, or acute respiratory syndrome and death.”
Capital Economics senior economist Gareth Leather said:
“For now, we are keeping our economic forecasts for this year unchanged, but the spread of the virus is clearly a major downside risk and we will continue to monitor the situation closely. If the virus does spread, the worst affected countries are likely to be those most dependent on Chinese tourist spending. In addition to China itself, Hong Kong stands as the most exposed. Thailand and Vietnam are also vulnerable.”
“So far there have only been six fatalities, mostly apparently of people with pre-existing conditions. Most patients have shown only relatively mild symptoms,” added he.
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