All the charts in this article were published dynamically, so they are always updated with the latest data. The commentary, however, was written on February 28th, so it may not always match the chart’s latest update.
On December 31st, 2019 the World Health Organization was informed about a new type of coronavirus.
Since then, the spread of COVID-19 outside of China has sent a shockwave through global financial markets. As of today, the virus has infected over 80,000 people worldwide, although most cases are contained in mainland China.
The phenomenon seems to have mutated from a respiratory-infection-causing virus into a mental pathology that has spread uncertainty across the globe.
Outside of China
According to the WHO most cases outside of China are concentrated within South East & East Asia. Notably 55,000 people have been quarantined in Northern Italy , and Iran is experiencing a death rate around 10% which is more than 3x the global rate.
Over 40% of all Coronavirus cases outside of China are located within South Korea.
Countries that depend on intermediate goods to manufacture final goods are likely to be negatively affected by a virus-caused industrial downturn in South Korea, as South Korea plays a key intermediate role in the global supply chain.
Citi’s Long-Term Macro Risk Index ticked higher as Confirmed Cases (ex-China) as a percent of Total cases rose above 1%.
The Gold to copper Ratio reached a post-crisis high as fears of an industrial slowdown caused the price of copper to fall.
Countries (ex-China) that have confirmed cases of COVID-19 have seen their equity markets deteriorate in February.
According to the World Health Organization, on February 24th , COVID-19 infections increased at a higher rate outside of China than within China. The equity markets of Europe, Japan, and the United States have been hit the hardest since that day.
The MOVE index which is the bond market’s equivalent of the VIX has not reacted to COVID-19 fears as strongly as the equity market.
Over 80% of confirmed cases within China are in the quarantined province of Hubei. Wuhan, the capital of Hubei and the city of the virus’ origin, has a population of around 11 million and has been on “lockdown” since January 23rd, 2020.
January passenger travel within China had the largest decline in the last 10 years.
The online exchange PredictIt is betting that Chinese GDP Growth for Q1-2020 will be 5.7% or lower. If the exchange is correct, GDP for Q1 will fall well below the NDRC’s 2019 target of 6.5%.
Surprisingly, Real Estate in Wuhan appears to have brushed off the COVID-19 jitters. Wuhan is leading China’s cities in year over year price growth and is well above China’s 70-city average.
Although more cases are emerging outside of China, the total number of new infections is declining.
Zhong Nanshan, the man who discovered SARS in 2003 and now leads the National Health Commission’s task force, claimed that the COVID-19 outbreak may peak before March.
It is surely too early to say if the global economy will experience lasting effects, but here we are 59 days later…
Charts and commentary by Wadsworth Sykes