‘Everyone will get coronavirus, expert warns’
So read the heading on the front page of The Australian on Friday.
Beneath the heading, a brief intro describing how the Australian prime minister had ‘moved ahead of international health authorities to activate a pandemic plan, as one of Australia’s leading virologists declared everyone will eventually contract coronavirus…’
Given the wall-to-wall coverage of coronavirus, it was a pretty provocative headline. Enough to believe that a pandemic of biblical proportions could be upon us.
Yet the last phrase of University of Queensland virologist professor, Ian Mackay’s quote from The Australian, gives some valuable perspective.
He states: ‘…but for most it will be no worse than a bad cold.’
If only this last bit was the headline rather than the other way round. But who in the media is going to let a scary headline go to waste?
The World Health Organization’s (WHO) ticking table works as a handy prop to promulgate the fear. The number of days since the virus started…the number of cases and deaths thus far.
Here’s the table as of this morning:
Source: WHO, Australian Government
It’s a dramatic snapshot. Timed down to the second as you can see.
The article goes on to quote Professor Mackay in more detail:
‘We already have four of these coronaviruses, mostly causing colds. We get them every year. They peak during winter but they still move around between us during the rest of the year as well. So it’s likely this might become one of those.’
And that, as it turns out, is why we are all likely to eventually catch coronavirus. This latest coronavirus might be the cause next time you catch a cold.
Markets always look to the future
Markets always look to the future. Whatever the eventual impact from coronavirus will be, that time is just too far away for the markets.
In the meantime, fear preys on fear, as markets across the globe get demolished.
When the markets go into freefall — as they have done — there’s nothing to be gained from playing the hero. That is, trying to buy the bottoms and ride the market back to its highs.
No matter how much data you read or how many price charts you analyse, there is always something you won’t know. You simply can’t stand in the way of all that.
As you can see in the earlier table, there are over 87,000 cases worldwide, with the number of confirmed deaths approaching 3,000. Those are the numbers nearly eight weeks into the alert.
Yet as tragic as the death toll has been, it is hard not to compare this virus to other maladies.
We’ve all read countless articles about the number of deaths annually from the common flu.
In the US alone, the number of deaths each year from the flu is approximately 60,000. That equates to around 1,150 per week.
In other words, it’s taken nearly eight weeks for coronavirus deaths to match the number the common flu kills in the US in less than three weeks.
Perhaps sadly, US health officials expect flu deaths to be around this number. Meaning, there is no surprise…nothing to scare the markets.
No doubt it’s a similar story with the number that die annually from malaria. UNICEF puts that number at over a million, with the vast majority African children under the age of five.
Sadly, this too barely makes a dent in the news cycle.
Yet the coronavirus is front and centre of just about every news service in the world. A virus that has a mortality rate of around 2% in China, and less than 1% in South Korea.
In fact, going directly from the most recent ‘Situation Report – 41’ on the WHO’s website, South Korea has 3,736 recorded cases, with 18 confirmed deaths. That’s a mortality rate of less than half a percent.
Japan, with the next highest tally of cases in the Asia region has 239 cases, with five confirmed deaths — a mortality rate of 2.1%.
And in Europe, Italy has the highest number of cases at 1,128 cases with 29 confirmed deaths — a mortality rate of 2.5%. The next highest in Europe is France with 100 cases and two confirmed deaths — a mortality rate of 2%.
Up until now, globalisation has meant different things to different people.
For Western consumers, globalisation has meant swags of cheap goods. And for those that make them in third world and developing countries, a chance to escape poverty…however tenuous that hold might be.
No country is out of the link
For blue-collar workers from the West, though, it has meant something altogether different. For them, it is something that has killed too many jobs. Western labour forces have in many cases simply been priced out of the market.
The coronavirus, however, brings another dimension to globalisation. It reinforces just how much everyone is interlinked.
A pocket of viruses contracted in Italy might be enough to take a US-based airline to the brink. An infected grandparent of a Chinese student studying in Australia might put a whole college in Australia or New Zealand out of work.
Everything flows into everything else — no country is out of the link.
And that is why we need to keep a pragmatic eye on all the data. As I say, there is always something we won’t know.
Taking a pragmatic view, this coronavirus seems less deadly than some of the more common killers, like the regular flu.
Yet, the dramatic falls in the market tell us there is a lot more we don’t yet know. Having bounced off its lows on Friday, the Dow futures are again pointing down as I write.
To take this market on when it is swinging all over the place is akin to throwing a feather at the wind. Or in this case, throwing that feather at a tornado.
At some point the disjoint between the number of deaths and the market’s reaction will be there to see. But until then, perhaps best to keep the powder dry.
All the best,
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