Is A U.S. Coronavirus Outbreak Imminent?
Unfortunately, yes. In fact, it is already probably happening, but is so far undetected.
The US is currently conducting an average of only 16 tests for coronavirus per day, and has so far only tested 426 (as of yesterday) of its more than 326mln population for the virus. 57 cases have been confirmed. Compare that Europe, where thousands of people are being tested everyday.
Unfortunately, the US CDC’s initial coronavirus testing kits, which were distributed to the various states over the past few weeks turned out to be mostly faulty, and unable to detect the virus. A new, functioning kit has been distributed, but this delay will likely prove highly costly.
More broadly, the US response to the outbreak has been shambolic. More concerned about stopping losses in the stock market, US President Trump yesterday declared that the US was “in control” of the virus and that a vaccine is near.
How can you be in control of something you are hardly even testing for? Later, White House officials clarified that the vaccine Trump was referring to was actually for Ebola.
Instead of lying to the public because you don’t like the stock market being in the red, Mr Trump, how about trying to actually effectively deal with the problem at hand and thus instilling confidence in markets again.
Anyway, the CDC did not follow Trump’s sanguine tone; they effectively sounded the alarm yesterday, saying an outbreak in the US was a matter of if rather than when.
Forgetting about the politics though, when all is said and done, an outbreak of coronavirus is likely already underway in the US.
How will this affect markets?
Markets will be expecting the US numbers to increase in the coming days. The rate of this increase will be important. Should its be a jump high like we have seen in Italy and South Korea, markets will panic. Stocks will plummet further, as will crude and havens (JPY, gold and CHF will be buoyed).
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