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Quote:The comparison is, presumably, intended to warn long-term investors against panic. Fair enough, not panicking is a reasonable default position in most market circumstances. But, just as one wouldn’t expect stock market tips from an epidemiologist, so it’s ridiculous for City pundits to push the thesis, however vaguely, that the spread of one viral outbreak might be a bit like another. One suspects the scientists apply more rigour. Second, China is a very different place now than it was in 2003. Its economy is far larger and more connected with the rest of the world, so economic shocks could be magnified. Most City pundits make this point, but then inexplicably cling to the idea that the stock market response might be similar anyway. There’s no logic there. Third, the starting point of stock markets surely also matters. At the end of 2002, stock markets were still in a funk after the bursting of the dotcom bubble, but then began a long upwards march at the start of 2003, which coincided with the Iraq War. Today’s climate is different. We’re many years into a global bull market and valuations, at least in the west, are generally regarded as “stretched” by usual yardsticks.

Quote:Financial markets may get their first sign of the effects of the viral outbreak on global supply chains when Chinese factories restart production on Monday. Most of China has been closed since late January in observance of the Lunar New Year, and government officials across China had ordered businesses to remain shut until Feb. 9, according to the South China Morning Post. Extended closures due to the deadly pathogen is expected to end, at least for some businesses, at the start of the coming week and their reopening will be acutely watched.

Quote:As Olivier Blanchard, senior fellow at the Washington-based Peterson Institute for International Economics, puts it in a series of tweets, “virus measures aim at the core of economic organization, the division of labor.” And because the steps taken by governments have to be extreme, they have the potential to pose a serious risk for economic activity. The disruption of supply chains, due to closed factories or exports coming to a standstill, could spread as fast as the virus itself through the global economy. From a macroeconomic viewpoint, Blanchard notes, what is not yet officially a pandemic is “an unusual supply shock.” Fiscal policy, the former International Monetary Fund chief economist says, would be of little help to fight a slump that is not due to a lack of demand.

Quote:Harvard epidemiologist Marc Lipsitch told The Wall Street Journal that "it's likely we'll see a global pandemic" of coronavirus, with 40 to 70 percent of the world's population likely to be infected this year. "What proportion of those will be symptomatic, I can't give a good number," added Lipsitch, who is the Director of the Center for Communicable Disease Dynamics at the Harvard T.H. Chan School of Public Health.  Two other experts have recently given similar estimates.

Quote:The Diamond Princess cruise ship went from 10 cases of the new coronavirus to more than 690 over the course of its two-week quarantine and the testing that followed. Experts and officials have criticized the decision to keep people on the ship and many poor hygiene practices onboard. Here’s how the cruise ship ended up with more than half of all novel coronavirus cases outside China. For the latest case total, death toll, and travel information, see Business Insider’s live updates here.

Quote:A worsening coronavirus outbreak reportedly could threaten shortages of about 150 prescription drugs, several of them with no alternatives. China’s role in supplying the ingredients used in medications means that decreased Chinese production capability amid the outbreaks could threaten supplies of the drugs, which include antibiotics, generics, and branded drugs, two sources familiar with a Food and Drug Administration (FDA) list of at-risk drugs told Axios.

Quote:The world’s largest iPhone factory has offered workers free transport, meals and accomodation in an attempt to ease labour shortages resulting from the coronavirus Covid-19 outbreak. Foxconn Technology, which operates iPhone assembly plants in China, is also reportedly offering bonuses of up to $1,000 in its efforts to lure employees back to work, according to industry sources cited by Digitimes.

Quote:To date, at least as far as the U.S. is concerned, the main impact of the disease has been on aggregate supply. The Fed’s interest-rate tool is designed to address aggregate demand. So the cause and the cure would appear, on the surface, to be incompatible. The Fed can’t produce parts for automobile manufacturers across the globe that are dependent on intermediate-goods imports from China. It can’t reopen factories in Hubei Province, the epicenter of the coronavirus outbreak. It can’t provide needed factory workers for plants in locked-down areas of China. And it can’t create alternate supply chains as a substitute for China’s role as manufacturer to the world.