Am I the only one who thinks the market's reaction to the coronavirus outbreak is...

I just found this article about the "regular" flu in the U.S.

quote:

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The Centers for Disease Control and Prevention (CDC) estimates that so far this season, there have been at least 15 million flu illnesses for the 2019-2020 season, 140,000 hospitalizations and 8,200 deaths in the U.S.

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American cases of flu so far this season:

"Regular" flu: 15,000,000

Coronavirus: 5


American deaths so far this flu season:

"Regular" flu: 8,200

Coronavirus flu: 0


"Coronavirus is spreading--but the flu is a greater threat to Americans"

I agree the virus fear is way overblown BUT the market is very sensitive at these valuations and it is discerning that such a small crisis is having the impact that it has.

It is scary to think what the market would do if some central bank tightened or some war broke out or if Trump was removed from office or something like that.

This reminds me of 2000---I hope that does not happen again!!!

Who is going to make all of our cheap Chinese crap if all of the workers are on lock down?

quote:

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The media coverage I've seen has been pretty fact based.

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The media created "crisis" as I refer to it was demonstrated a little while ago when CNBC broke into their program to report that a first case of human-to-human transmittal of the corona virus has been identified in the U.S. The reporter was almost breathless as she reported this "frightening" news.

The fact is over 15,000,000 cases of the regular flu has been identified just in the U.S. this flu season and everyone of those 15,000,000 cases have been from human-to-human transmittal.

The market's reaction overdone? I didn't think the market even reacted much at all. Basically traded sideways or slight decline with a return to average volatility from abnormally low.

You cite the medical analysis of the virus, but markets aren't about medicine, they are about economics. China is a key player in the world economy, its growth has slowed to multi-decade lows, and they had to quarantine 50 million people. In just a couple of weeks, the epidemic has surpassed SARS total which took months. While not as deadly as SARS, it is still far more deadly than the regular flu. That scares people, and makes people want to avoid catching it by avoiding interacting with other people...meaning less economic activity. Oil has steadily fallen on top of all of this due to reduced demand expectations.

Way overdone? not at all.

Transportation both within and to China will be significantly lower for at least one fiscal quarter, maybe more. That will reverberate through the Chinese markets which makes up a good proportion of world GDP.

Easy example:
China travel declines due to virus keeping people at home
China is a big part of Trip.com's market
Trip's revenues and stock price go down

Side note: I was in Thailand last week. At the airport there, about 60% of people were wearing masks (which don't do anything but that's another story). When I got to Atlanta, 0% of people were wearing masks. So the fear is real in Asia. Fear is enough to prevent travel.

Serious question--how do they know what the fatality rate is for this strain of Coronavirus??

The market is in complete hysteria! We hit lows not seen since January 7th.

I think there is a legit reason to worry. One of my suppliers from China already mentioned delays because of the virus and I'm sure there are more on the way. If we keep seeing cities shut down, we'll see some major disruptions in the supply chains for more global retailers.