Why Stocks are down Especially in South Korea and Italy

All Information Comes from Worldometers.info/Coronavirus

The spike the last few days have been due to Increases cases in Italy and South Korea
Outside of Hunan Provence trend is down for new Cases.
Take notice of Which Countries are the biggest piece of the pie.

Total case progression in Italy:
Feb. 24: 229 cases (day still in progress)
Feb. 23: 157 cases
Feb. 22: 79 cases
Feb. 21: 21 cases
Feb. 20: 4 cases

AGE
DEATH RATE*
80+ years old 14.8%
70-79 years old 8.0%
60-69 years old 3.6%
50-59 years old 1.3%
40-49 years old 0.4%
30-39 years old 0.2%
20-29 years old 0.2%
10-19 years old 0.2%

Curve bias -IFR news

Highlighted Commentary what I feel is most important in this piece

As it concerns the yield curve the directional belly of the curve has taken over the leadership from the long-end with this too likely to persist unless the virus situation improves.


As much of the global economic fallout is seen as impacting the supply side (shut businesses and quarantined workers) there is not a lot that central banks and/or fiscal stimulus can do to address a situation whose remedy is a virus vaccine. Even so, central bankers, including the Fed fancy themselves as risk-managers. As they guided, they will be closely monitoring the situation. Should the virus situation worsen (and should equities suffer significant loses) the Fed’s “outlook” will surely change. This suggest that an already relatively low bar for the Fed to ease has moved even lower.


With this, we will reverse our curve bias to one of further flattening to one of steepening if the belly will likely continue to outperform until the Fed signals a rate cut is imminent.

WHO commentary

• Research suggest bats are main source of Coronavirus, with possible intermediate host
• Average age of confirmed patents is 51
• Main transmission pathway is respiratory droplets, fecal. possibility of aerosol but this is not main pathway
• Virus is age impartial, universally susceptible
• Over 3,000 Medical Staff Infected – WHO Team in Beijing
• Most cases are mild, 80% mild, 13.8% severe, 6.1% Critical
• Fatality rate 3-4% in China, excluding Wuhan 0.7%
• Diagnostics have improved
• Two weeks for mild recovery, 3-6 weeks for severe
• China took old fashioned approach but response in China changed over time to science and risk based approach
• China’s bold approach has changed course of rapidly escalating epidemic
• Declined in China Coronavirus Cases is ‘Real’ – WHO Team in Beijing
• WHO notes steep drop in fevers reported at hospitals, hospital beds opening up
• Challenge for developing an anti-viral trial is to find cases because of the drop in patients
• China’s approached helped avoid tens if not hundreds of thousands of cases in China
• Outbreak cases could come back up as China opens up again
• The world needs experience and material of China in battling coronavirus disease
• Barriers against China will compromise response
• Country has demonstrated its measures can work
• Global community not ready with mindset or materials to use China’s measures
• China felt a responsibly to protect world from virus, they locked down cities of millions for weeks to prevent spread, and it slowed spread
• Only one drug with real efficacy, remdesivir (Nasdaq: GILD)

A drop in Chinese cases but increase in Cases of Corona Virus in other parts of the World, South Korea and Italy, Creating an Ugly risk Off Day! WHO officials in China This week.
Markets:
Spoos -2.56%, Stoxx 50 -3.45% Mib -4.65% (the new Worry zone is Italy), Dax -3.5%,South Korea-3.87%( the other worry Zone) and Shanghai Only closed down .23%. U.S. 10 year yields trading below 1.4%,All time low yield is 1.31%,30 year yields 1.84% Gold +.2.2%,Silver +1.5% Soybeans -1.4%,Copper -1.4% and lastly CL -3.9% and Brent -4.2% Flight To safety products up and products that drive economy are lower


New coronavirus cases fall in China, but WHO concerned by global spread- The World Health Organization welcomed the reported decline in new Chinese cases, but said it was concerned about the number of new infections elsewhere with no clear link to China such as travel history or contact with a confirmed case of COVID-19, as the disease caused by the virus is known. https://www.reuters.com/article/us-china-health/new-coronavirus-cases-fall-in-china-but-who-concerned-by-global-spread-idUSKCN20G05W

News headlines

  1. S Korea: increased COVID-19 cases increase by 161 to 763; ~7.7k troops have been quarantined after 11 were infected
  2. Gov Of Lombardy Region of Italy (23 Feb): Number of cases in region rise to 89
  3. -ITA Official(23 Feb): 3rd person died of COVID-19 in N Italy; more than 150 cases have been reported in Italy, emergency measures have been imposed on areas in Lombardy, Veneto & Milan https://bbc.in/32lEYlp
  4. -OE24: Austria have stopped all train traffic to Italy
  5. WHO’s Tedros(22 Feb): Concerned about number of COVID-19 cases with no clear epidemiological link such as travel history to China/ or contact with a confirmed case
  6. Update: Cumulative cases 77262(+416); Cumulative death toll 2595(+150); Cumulative healed 24758(+1851) https://bit.ly/2upYaSr

Aussie Dollar Tests 11-Year Low, Yen Gains on Virus Concerns- The Aussie, seen as a proxy for global growth risks because of the nation’s ties to China’s economy, sank as much as 0.5% to 65.91 U.S. cents. On Friday, it touched 65.86 U.S. cents, the weakest since 2009. The yen advanced for a second straight day, by 0.3% to 111.33. https://www.bloomberg.com/news/articles/2020-02-23/aussie-dollar-tests-11-year-low-yen-gains-on-virus-concerns?srnd=markets-vp

Italy quarantines northern towns in coronavirus outbreak- Number of cases tops 150 in Europe’s biggest cluster as fears grow over pace it is spreading
https://www.ft.com/content/2f937640-5621-11ea-abe5-8e03987b7b20

All central banks have pledged Financial assistance of Some Shape or Form. Fiscal Policy also likely to be called upon to Stabilize Markets if need arises. ( ECB central Bank Official said
‘ Governments need to open the Fiscal Spigots” An Economist at CFC financial raises possibility of Zero,0% Q1 GDP growth for China.