The stock market cheered the opening of China’s factories on Monday. But now there are fresh concerns about the lingering presence of the coronavirus in public places that threaten to derail progress in the S&P 500.
Reports have surfaced in Hong Kong that the virus could be transmitted through the environment and not just person to person as was previously believed. This is a worrying development for the U.S. stock market, which has been resolutely optimistic about China subduing the epidemic.
The significance of a case of environmental transmission in Hong Kong is not something that was commonly discussed regarding the coronavirus. While there was a close check on person to person contact spreading the disease in densely populated China, so far talk of the more sinister environmental spread has been limited.
An explanation of how a virus spreads through its environment from the NCBI is stated as follows,
Viruses pass into the environment from clinically ill or carrier hosts; although they do not replicate outside living animals or people, they are maintained and transported to susceptible hosts.
This means that quarantine efforts may be limited in their capacity to reduce the spread of the virus if it turns out that it shows resilience outside of a host.
The stock market cheered the opening of China’s factories on Monday. But now there are fresh concerns about the lingering presence of the coronavirus in public places that threaten to return and derail the progress in the S&P 500.
Interestingly, China appears to have been demonstrating to us that environmental transmission was a big problem for the duration of the outbreak.
Plenty of videos have emerged, particularly in the Hubei province, pumping what appears to be disinfectant into the air around the city. Sometimes it’s done from individuals spraying white clouds in city areas, and other times it’s a vast procession of tankers.
The fact that President Xi only just appeared today also suggests that Beijing feared more than simply person to person infection.
As reported deaths near 1,000, with confirmed cases above 40,000 in mainland China, more information is becoming clear. Alarmingly, the WHO stated that 15% of cases are being reported to cause pneumonia, which is a chronic affliction of the lungs that is the primary cause of death in coronavirus cases.
Sebastian Galy at Nordea Asset Management provided CCN.com with his cautious view on the impact of the epidemic on stocks, stating,
The market is wondering if the coronavirus data out of China is accurate and has now a live experiment on a cruise ship off the coast of Japan… Fatalities should unfortunately come with a 10 to 20 day lag when many there are the vulnerable. We remain cautious on the global equity markets as per the past weeks. The economic damage of the coronavirus will take some time to percolate through profit warnings and deteriorating economic data.
Should Hong Kong confirm the case of environmental transmission in its apartment building, the true scale of the task at hand is going to become readily apparent.
Confident U.S. stock markets look like little will knock them off their stride. But this is undoubtedly a game-changer that seems to explain the “tip of the iceberg” comments from the WHO on Monday.
This article was edited by Gerelyn Terzo.
Last modified: February 10, 2020 11:20 PM UTC