Wall Street’s growing fear: Coronavirus “to get worse before it gets better”
CBS NEWS – Concerns are growing on Wall Street that the coronavirus could cause serious economic damage beyond China, with analysts warning that the deadly outbreak is unlikely to recede anytime soon.
“Consensus is that this coronavirus outbreak (COVID-19) is going to get worse before it gets better,” Raymond James analysts said Tuesday in note to investors. “It seems as though the market is under-appreciating the potential dangers and what the key government leaders on the virus are saying.”
Amplifying those concerns: This week’s guidance from Apple — a bellwether both for the high-tech industry and the broader U.S. economy — that the iPhone maker would miss its quarterly sales target because of the virus’s impact on the company’s sales and production in China. Apple shares fell nearly 2% on Tuesday.
The swiftly changing sentiment has investors reconsidering outcomes should the coronavirus prove more pervasive than feared.
The Raymond James analysts, citing interviews with public health experts and other sources, said they believe the number of cases in China to be 400,000 or more, dramatically higher than the official count of at least 73,000 confirmed infections and at least 1,874 deaths, all but five of them in mainland China.
The odds of a notable outbreak in the U.S. have increased to one in five from one in seven, according to the investment firm.
And, given it took between seven weeks and 10 weeks for the virus to reach epidemic levels in China, it’ll likely be another two weeks to four weeks before it’s known if there will be any widespread outbreak in the U.S., the analysts noted.
“One growing area of concern is that there was an assumption that this would be like SARS and by summer it would go away.
Now there is a growing belief that this could become an annual seasonal virus (like colds and flu) or a global pandemic which means it would spread across the globe until ‘herd immunity’ is reached,” they wrote.
“Significant shock” to global system?
Other Wall Street analysts are sounding alarms, too. The outbreak represents a “significant shock” that’s likely to have material ramifications for the global economy … Read more.
