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 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.
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.
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.
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.
Last modified: June 12, 2020 10:30 PM UTC