Asian stock markets suffered a brutal selloff overnight, pulling the U.S. stock futures with it. Dow Jones Industrial Average (DJIA) futures fell 29 points, pointing to a nervous open on Thursday.
Traders remain nervous as the deadly China coronavirus threatens to spread further through the U.S. One Seattle man has contracted the virus, but the health authorities are bracing for more.
“We expect additional cases in the U.S.” – Dr. Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases
At least 16 additional U.S. citizens were identified as potential carriers of the China coronavirus, which has now killed 17 and infected 600.
Dow futures contracts followed the Asian markets lower on Thursday as traders weigh the impact of a potential global pandemic on the economy. It comes after a relatively flat session on the stock markets yesterday.
S&P 500 futures and Nasdaq Composite futures also struggled to break into positive territory. Safe havens like gold rose as a response to investor nerves.
Late on Wednesday evening, Washington state health authorities confirmed that at least 16 people are being monitored for the coronavirus. A Seattle man in his 30s returned from Wuhan, China with the virus last week and listed 16 individuals he had close contact with.
“All the close contacts will be part of what we call ‘active monitoring.’ That means that a public health worker will call the person daily to do a symptom check for them, see if they have a fever, cough, any respiratory issues” – Washington state Secretary of Health John Wiesman.
The virus has an incubation period of seven days, so carriers don’t immediately show symptoms. Although they are being monitored, the 16 individuals are not in quarantine. The virus is not thought to be contagious until symptoms appear.
American authorities have acted quickly to prevent an outbreak like the Sars virus of 2003 which infected 39 Americans. All flights from Wuhan are being diverted to one of five U.S. airports with strict screening procedures.
Scientists are racing to create a vaccine, but it could take months. The coronavirus is a ‘novel’ outbreak and ‘mutated’ to jump from animals to humans. As such, there’s no existing vaccine.
Precautions were ramped up in China overnight, too. The government effectively shut down Wuhan, a city of more than 11 million (larger than New York). Public transport was closed and flights out of the city were suspended as of Thursday morning.
Global pandemics have the potential to wreak havoc on international economies. People stop going out, stop travelling, and only spend money on essentials.
The outbreak has been compared to the Sars virus of 2003 which sent some countries into recession. However, many analysts see this outbreak as a short-term dip and buying opportunity.
“There is a notable degree of investor caution, albeit not (yet) risk capitulation across markets. Until the data tells us otherwise, we will hope that the coronavirus does not become a repeat of 2003 and that any meaningful sell off in risk will be viewed by investors as a (selective) buying opportunity” Simon Ballard, chief economist at First Abu Dhabi Bank
The good news is that China has acted much faster to contain the spread, and the virus itself appears less aggressive. The World Health Organization (WHO) is expected to decide later today whether to declare a “public health emergency of international concern.”
Last modified: June 24, 2020 1:05 AM UTC