The appearance of the first U.S. coronavirus case in which the patient didn’t travel abroad, or knowingly come into contact with anyone who did, reverberated across markets on Thursday — and dovetailed with rising case numbers in other countries.
The virus continues to spread globally with more than 82,000 cases and more than 2,800 deaths. The greatest concerns are Italy and South Korea — which has surpassed the number of cases in China — as well as Iran, where the death rate is higher than other hard-hit areas.
America’s heightened state of emergency after its first “community spread” case underscores escalating concerns about a pandemic, and the increasing likelihood that the effects will be felt across the global economy. On Thursday, California governor Gavin Newsom said the state was monitoring 8400 people for potential infections.
It also contrasts with the growing optimism in the world’s second largest economy, where new infection rates have fallen. Starbucks on Thursday emerged as an avatar of that recovery, announcing that 85% of its stores were open in the country, after it shuttered half when the outbreak grew severe.
However, markets saw a sixth straight day of sustained selling, despite attempts from President Donald Trump to allay concerns that have triggered investor angst. Trump appointed a new coronavirus task force headed by Vice President Mike Pence, and on Thursday Reuters reported the administration may invoke an obscure law to boost domestic production of protective gear.
Dennis Carrol, USAID’s director of global health security and development, told Yahoo Finance in a recent interview that fear is a factor of time.
“What we don't know about the virus allows us to fill in a lot of empty space, and fear is something that happens very quickly when we see something like this kind of virus,” he said.
“But we don't really understand just how deadly it is. As science is rushing to better characterize and understand, there is an alarm going off that we need to react,” Carol added.
Shira Doron, an infectious disease physician and hospital epidemiology at Tufts Medical Center, told Yahoo Finance in an interview that hospitals are doing what they can to prepare. Yet without testing kits at the local level, and heavy reliance on the CDC’s labs, it is slowing down the response time overall.
What’s happening in markets
The pathogen’s widening infections abroad have made investors take fright, and forced companies to downgrade earnings expectations.
In recent days, Jet Blue (JBLU) , Paypal (PYPL), Microsoft (MSFT) and Anheuser-Busch InBev (BUD) have joined a growing list of companies warning about the virus’ consequences. Those industries join the travel, leisure and entertainment sectors in being walloped by the outbreak’s after-effects.
John Freeman, an analyst at CFRA, told Yahoo Finance the warnings from companies coming out now makes sense since “we won’t know what the economic impact is for another quarter.”
Meanwhile UBS said in a note Thursday that the biggest concern is consumer response to the outbreak.
“The importance of the consumer (globally) is why fear of the virus has the potential to do so much economic damage,” the firm’s team wrote.
“If fear is contained at current levels, the consumer will support growth. If fear takes hold in the real world, the economic damage will be significant,” UBS added.
Around the world
Cases are increasing globally, with spikes of cases in South Korea, the largest outside China, and a high mortality rate in Iran. The World Health Organization attributed Iran’s spread to the unseen and undetected cases, as the country may not be implementing a strategy to diagnose infections.
Concerns over the outbreak have prompted several high-profile events to get canceled — with more likely to follow suit. The largest luxury watch trade show, Watches and Wonders, scheduled for the end of April, while Facebook also announced that its developer conference had been nixed.
The cancelation signals that global concerns over the virus spread, which initial predictions saw tapering off in April, are extending late into the first half of the year. It may even impact the Olympics in Tokyo, which is grappling with a contained outbreak of its own.
The number of cases continue to decline on a day-over-day basis in China, as businesses are reportedly slowly coming back online.
Still, the response to the outbreak globally is leaving room for scrutiny as different countries respond differently, ranging from quarantine to travel bans and extra screenings at travel points. Cruise ships continue to face pressure, with ports denying access.