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Posted in: Market News
Published:
February 10, 2020 12:04 PM UTC

Dow Futures Shudder as WHO Issues Chilling Coronavirus Warning

The World Health Organization admits the coronavirus death toll of 910 could be the "tip of the iceberg" as it spreads rapidly beyond China.

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  • Dow Jones Industrial Average (DJIA) futures were flat on Monday.
  • Coronavirus fears continue to dampen investor sentiment as the World Health Organization admits current figures could just be “the tip of the iceberg.”
  • Even Wall Street bulls are bracing for a 10% correction in the stock market.

The stock market remains on edge this morning after a chilling message from the World Health Organization (WHO) director-general. Dow Jones Industrial Average (DJIA) futures were nervous as Tedros Adhanom Ghebreyesus said the coronavirus outbreak is just getting started.

In short, we may only be seeing the tip of the iceberg.

His statement came just hours before Britain declared the outbreak a “serious and imminent threat to public health.” What was previously a China problem is now officially global.

Dow futures slip 30 points

Dow Jones futures contracts were choppy overnight, slipping 30 points lower as of 5.49 am ET. Traders are wary of the spread of coronavirus which threatens to hit the global economy and even the housing market.

Dow Jones Industrial Average (DJIA) futures were choppy overnight. Source: Yahoo Finance

S&P 500 futures and Nasdaq Composite futures traded flat.

Coronavirus: the tip of the iceberg?

The statement from Tedros is an important shift in the coronavirus story. It’s the first time the WHO has struck a nervous tone. He admitted the situation has escalated as more people are being infected without travelling to China directly.

There’ve been some concerning instances of onward [coronavirus] spread from people with no travel history to China. The detection of a small number of cases may indicate more widespread transmission in other countries.

While official numbers put the death toll at 910, some estimates are terrifyingly higher. One whistleblower puts the figure closer to 50,000 with as many as 1.5 million infected.

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Britain declares “serious and imminent threat”

Acknowledging the global threat, Britain this morning declared the coronavirus a “serious and imminent threat” to the country. It comes as a further four British cases were confirmed, bringing the total to eight.

The declaration was made as one quarantined patient threatened to escape. The declaration gives the UK government stronger powers to detain suspected cases.

Currently the regulations are not strong enough to stop him leaving before the 14-day period is up so they brought in these new regulations to try and compel him to stay put – BBC political correspondent Iain Watson.

Elsewhere, a further 60 cases were reported on a cruise ship docked in Japan, taking the total to 130.

Coronavirus could trigger 10% Dow correction

Despite the outbreak, U.S. stock markets have held near record highs. But even Wall Street bulls are beginning to get cautious. Infamous bull Ed Yardeni is bracing for a 10% correction if the virus doesn’t slow down.

The longer that this virus threat continues to weigh on the global economy, the more it poses a risk for at least a correction in the stock market.

Yardeni said he’d keep cash on the sidelines as “dry powder” as the crisis unfolds across the globe.

This article was edited by Samburaj Das.

Ben Brown @_ben_brown

Ben is a journalist with a decade of experience covering financial markets. Based in London, UK, his writing has appeared in The Huffington Post and he was Chief Editor at Block Explorer, the world's longest-running source of Blockchain data. Reach him at benjamin-brown.uk or on Twitter at _Ben_Brown. Email ben @ benjamin-brown.uk.

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