To circle back to the start of this thread:
80% of Chinese manufacturing is on ice. And China is 17% of the world’s GDP. The math is self explanatory.
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It is a black swan no doubt. But the US economy is also on fire lately. Which of these two countering factors win out? I have no idea.
I suspect that the trade war actually inoculated the US a little bit. The market already had to deal with a lot of China related bad news in the last two years or so. Expectations are coming from a suppressed base.
But honestly I don’t know.
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• Facebook (NASDAQ:FB) says the coronavirus outbreak is set to hit production of its Oculus VR headsets, which are made in China.
• Last year’s Oculus Quest is out of stock in some regions, UploadVR notes, and a combination of high demand and the virus is likely to have an impact on future availability.
• Facebook has instructed employees to cancel nonessential trips to China; Bloomberg notes a source said the company was looking into facilities in countries like Vietnam to pick up some of the production slack.
Potential for death aside, it seems like this should only be beneficial to US’s manufacturing. Also should encourage large companies to outsource more widely to different geographic areas.
They should have done this long ago. When I was in QA I always qualified alternate suppliers. You just never know. Corporate realignments, financial problems at suppliers or their subcontractors, disease, war, earthquakes, volcanoes, nuke plant meltdowns…
As for the cruise ship remarks - look at the history Those things are incubators for disease. How many outbreaks of this or that have happened on cruise ships? Not a good predictor of anything. And no, I’ve never taken a cruise nor do I ever plan to.
They still do that today. Unfortunately both suppliers would be in China. And even if you put part of the final build in another country, the downstream components come out of China. So much manufacturing has moved there, the Wuhan virus is showing how the world has become shackled to China.
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The impact will depend on how long this lasts. One bad quarter of GDP won’t hurt the big picture. If the impact is more than one quarter, then it could cause a global recession.
Inventories are usually lower after the holidays too. That means there’s less buffer for supply chain issues.
We had a single case here, and it didn’t seem to spread at all. I haven’t heard of a second case.
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Spoke too soon. Number of new cases dropped two days in a row but now is back up.
Only saw Chinese source. Someone from Chinese academy of medical science claimed that only 30 to 50% of infection cases were detected by current diagnosis kits. Real infected cases likely much higher and patients released from hospitals may spread the virus unknowingly.
Apple in deep trouble.
The best case is that the virus will be contained quickly and the quarantines lifted soon, leading growth to bounce back. This is largely what happened after SARS, when both Chinese and global growth bounced back to trend after only a couple of months and the disruption was hardly noticeable over the course of the year.
So far, investors are betting the same outcome.
The reproductive number of 2019-nCoV is not precisely known, but early indications are concerning. A study of the first 425 cases published last week in the New England Journal of Medicine estimated it at 2.2. This is higher than influenza (usually in the 1.2-1.8 range) and roughly comparable to SARS before intervention slowed the reproductive number to less than 1.
Excluding Hubei, about 0.2-0.3%.
Comment on article in nytimes
I am curious why media outlets report the numbers of infections and deaths as fact. At best, they require the qualifier “confirmed via testing, which is limited.” And reading between the lines, require scrutiny as to the source, with a qualifier like “cases reported by the Chinese government, but not yet confirmed by international experts.” I say this because a Chinese MD I know who is working in the US as a post-doc, and who personally knows many of the doctors called into Wuhan to treat patients, has said that these doctors have told him the official infection numbers are extremely underreported. They were estimating more in the ballpark of 100-200K by last week. This would line up better with epidemiological estimates published based on early infection rates, and would better explain Xi’s heavy-handed lockdowns etc. It does not seem plausible that he would tank the economy over the official numbers reported.
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2656 new cases. Huge drop.
Coronavirus: China reports 89 new deaths, global total matches WHO’s Sars figure
Actually it’s up. (#-wise, didn’t do the math on %. from 1966 to 2652). Here’s a nice site that is keeping a running history with full sourcing of all the going ons:
I am talking about the new confirmed cases. Here’s the Sina source your website links to. The red dots are daily new confirmed cases.
It went down for two days in a row, rose for the 3rd day, but took a big drop today.
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Market rockets on Monday.
HK is part of China, how come count as international?
Outside Hubei, fatality is only 0.2-0.3%.