'The worst is yet to come': Global stocks are under pressure as fears mount of a coronavirus pandemic - Business Insider

Reuters

• Global stocks tumbled on Wednesday morning as investors braced for the novel coronavirus to escalate into a pandemic.
• The flu-like illness COVID-19 has infected more than 80,000 people, killed at least 2,700, and spread to about 40 countries.
• "It's not so much of a question of if this will happen anymore but rather more of a question of exactly when this will happen," Dr. Nancy Messonnier, a US federal health director, said about the prospect of a domestic outbreak.
• "Despite this week's big sell-off in equity markets, the worst is yet to come," the economist Nouriel Roubini wrote in a Financial Times column.
• Visit Business Insider's homepage for more stories.

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Global stocks tumbled on Wednesday morning as fears that the novel coronavirus would escalate into a pandemic rattled markets.

The virus — which originated in the Chinese city of Wuhan and causes a flu-like disease called COVID-19 — has infected more than 80,000 people, killed at least 2,700, and spread to about 40 countries.

South Korea has reported more than 1,200 cases, and a growing number of European nations are dealing with infections. A Brazilian patient has also tested positive for the coronavirus, according to the BBC, suggesting the virus has spread to South America.

While the US is yet to suffer a major outbreak, federal health officials warned on Tuesday that it's inevitable.

"It's not so much of a question of if this will happen anymore but rather more of a question of exactly when this will happen," Dr. Nancy Messonnier, the director of the National Center for Immunization and Respiratory Diseases, said at a news briefing.

The White House has struck a different tone. President Donald Trump said the virus was "very well under control in our country."

Trump's economic adviser, Larry Kudlow, also downplayed the problem. "We have contained this," he said. "I won't say airtight, but it's pretty close to airtight."

Here's the market roundup as of 9:45 a.m. EST:

• US stocks opened sharply higher. The Dow Jones Industrial Average and the S&P 500 rose by about 1%. while the Nasdaq climbed 1.4%.
• European equities pared their losses. Germany's DAX rebounded to trade up 0.3%, Britain's FTSE 100 was flat, and the Euro Stoxx 50 rose 0.5%.
• Asian indexes closed in the red, with China's Shanghai Composite down 0.8%, Hong Kong's Hang Seng down 0.7%, and Japan's Nikkei down 0.8%.
• Oil prices recovered, with West Texas Intermediate flat at $49.90 a barrel and Brent crude down 0.3% at $54.10.

Several companies including the alcohol giant Diageo and the food-and-beverage titan Danone warned this week that the coronavirus was hurting their businesses. The Dow and the S&P 500 on Monday and Tuesday posted their worst two-day declines since last February, and the Dow also slumped to its lowest level since October.

Several commentators sounded the coronavirus alarm following the initial sell-off.

"Markets have finally woken up to the threats being presented by COVID-19," Michael Every, a senior Asia-Pacific strategist at RaboResearch, said in a morning note.

"Investors are deluding themselves about how severe the coronavirus outbreak will be," the economist Nouriel Roubini wrote in a Financial Times column. "Despite this week's big sell-off in equity markets, the worst is yet to come."

The one-two punch of a US-China trade war and a public-health crisis could hammer economic growth in China and elsewhere, said Jasper Lawler, the head of research at London Capital Group, in a morning note.

"The two global headwinds to strike China in such short order could do the unthinkable and put the global economy into recession," he wrote.

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2020-02-26 13:49:05Z
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