Weekly Economic Report
Markets remain dominated by the Wuhan coronavirus, which is still accelerating at an accelerating rate. We are closely watching the daily announcements of cases, and to a lesser extent, deaths. The number of cases has been rising at a faster rate, with the exception of a surge on January 25th, when the Chinese government shifted from information repression to fuller accounting. In the last four days (through Saturday) the case count rose by roughly 1450, 1765, 1900 and 2200. The number of deaths is also rising, but in an irregular pattern, as the numbers are still relatively small. A shift in the second derivative to growing, but at a slower rate, is crucial to how markets handle the end game of this disease. Like most viruses, it is likely to disappear as weather warms. For the markets, determining when that pivot point comes will be critical to ending downward pressure – particularly on commodities, where China is a key player. Copper is down over 10%, and for a record 13 days in a row, as the markets worry about Chinese demand.