Originated in Wuhan, China Dec. 31, 2019 the coronavirus, AKA Covid-19, has spread like wildfire, leaving the World Health Organization [WHO] and other state-centers for disease control in quandary. Now spread to nearly 80,000 cases in China with over 2,500 deaths, U.S. officials at the Centers of Disease Control [CDC] don’t know if Chinese authorities have given accurate data on the diagnosis-and-spread of the disease. Wall Street hasn’t figured out yet how to stem the two-day sell-off that left the Blue Chip’s Dow Jones Industrial Average down nearly 7% in only two trading sessions. Any 10% drop in major stock averages is considered a “correction,” something badly needed for an overly inflated market. Wall Street can’t figure out how far the current sell-off should go, especially as it relates to the U.S. economy. China’s eradication program hasn’t stopped Covid-19 from spreading to other countries.
Reports that China minimized the extent of corronavirus spread indicates that Chinese President Xi Jinping has far bigger crisis on his hands than admitted to Dec. 31, 2019 when the outbreak occurred. “Ultimately, we expect we will see community spread in this country,” said Nancy Messonnier, senior CDC official fueling more concerns on Wall.Street Dropping 879.64 today or 3.15%, U.S. investors heed the advice of Mohamed El-Erian who warned investors today about buying on dips with Covid-19 out-of-control. El-Erian doesn’t think that Wall Street’s buy-on-dips strategy, that’s fueled profits for years, works under Covid-19’s dark cloud of uncertainty. Nothing from the WHO or CDC gives Wall Street analysts any reassurance going forward. More bad news from such remote places as Iran or Milan, Italy continues to spook investors from jumping back in.
Speaking in India, 73-year-old President Donald Trump tried to calm markets but no one yet sees light at the end of the tunnel. “It’s not so much a question of if this will happen anymore, but rather more a question of exactly when this will happen, and how many people in this country will have severe illness,” Messonnier said. Messonnier’s remarks contrast sharply with Trump’s chief economic adviser Larry Kudlow, insisting Covid-19 has been contained in the U.S. Messonnier said it’s not a matter of if but when the coronavirus spreads in the U.S. Drug-makers have not come up with vaccine that can help stop the virus spread in the U.S. Currently, there are 58 cases of coronavirus cases in the U.S., many of which were infected in China. “For schools, options include dividing students into smaller groups or in a severe pandemic, closing schools and using Intenet-based tele-schooling,” Messonnier said.
When you consider the lax borders in the U.S., it’s a matter of time before the virus spreads, like it has other countries like Italy and South Korea. China has taken draconic measures, using SWAT teams to disinfect diagnosed cases without much success. Chinese authorities have shuttered factories, telling workers to go home until they’re cleared by the government to return to work. “For adults, businesses can replace in person meetings with video and telephone conferences and increased tele-working options,” said Messonnier. Hospitality and transportation stocks have been hammered, with travelers canceling trips due to Covid-19 fears. China’s multibillion dollar tourist industry has been decimated, causing a severe impact on China’s already faltering Gross Domestic Product [GDP]. Apple Inc. announced disruption to its supply chain of iPhone 11s, now in high demand.
No one really knows the extent of China’s Covid-19 outbreak, with government officials minimizing the widespread nature to coronavirus infections. While boasting about building makeshift hospitals to deal with the outbreak, China’s hospital network has been stretched to the breaking point. “You should ask your children’s school about their plans for school dismissal or school closures. Ask about tele-schooling. I contacted my local superintendent this morning with exactly those questions,” said Messonnier, trying to get citizens ready for she believes will be more Covid-19 cases coming to U.S. soil. CDC officials have fast-tracked the antiviral drug remdesivir to treat coronavirus cases. Without a vaccine in sight, the CDC works with the Food and Drug Administration [FDA] to get anti-Covid-19 drugs to market in the event of a widespread outbreak on U.S. soil.
China’s response to the Wuhan-originated coronavirus has been lacking systematic disease-control procedures, letting the virus spread rapidly in China’s 1.4 billion population. While 78,000 identified infections remains an infinitesimal fraction of the Chinese population, it’s still killed about 3,000 citizens. Government officials know it doesn’t take much for panic to set in, just look at Wall Street dropping nearly 1,900 points in only two trading sessions. Without repeating China’s mistakes, the Trump administration should get on the same page as WHO and the CDC, who’s been warning U.S. and global citizens to do more to contain the virus. Quarantining passengers on Cruise Ships can only go so far in stopping the spread of the virus. Developing a vaccine should be the highest priority for U.S. officials, getting anti-viral drugs fast-tracked to help control the spread and save lives.
