NEW YORK (Reuters) – Investment advisors are increasingly concerned that US authorities are not doing enough to prevent a widespread outbreak of coronavirus in the country, which could add more disadvantages to already battered markets.
FILE PHOTO: A woman wearing a mask to prevent coronavirus is reflected in the mirrors, in Seoul, South Korea, on February 24, 2020. REUTERS / Heo Ran / File Photo
His criticisms include the number of people tested so far by the Centers for Disease Control and Prevention (CDC). UU., Which some say is too small, the possible difficulties of imposing blockages in US cities. UU.
Concerns have increased the uncertainty that has accompanied the outbreak of coronavirus in recent weeks, as investors are quick to adjust their portfolios to the price on the potential for damage of the virus to the global economy and assess its greater impact on the prices of the assets.
The CDC declares on its website that “as of February 24, CDC teams are working with the Department of Homeland Security at 11 airports where all flights from China are directed to travelers returning to the United States and refer them to the US UU. health departments for the supervision of self-control “.
The Secretary of Health and Human Services of the USA. UU. (HHS), Alex Azar, said Thursday morning that the CDC had analyzed 3,625 samples to detect the fast-moving virus.
For some investors and analysts, those guarantees sound hollow.
“Much of what we have seen about this virus has shaken trust in governments,” said James Bianco, head of the Chicago-based Bianco Research advisory firm.
Its list includes doubts about China’s accuracy in case counting, criticism of Japan’s handling of a cruise ship quarantine in one of its ports, and the relatively small number of people that US authorities have tested so far.
Concerns about the growing number of cases outside of China sent the S&P 500 to the intraday correction territory on Thursday morning. The actions suffered an earlier blow on Wednesday after health officials in Nassau County, New York, said they were monitoring 83 people who visited China and may have been in contact with the coronavirus. Governor Andrew Cuomo said the state has had no confirmed cases so far. [L2N2AQ192]
On Wednesday night, US President Donald Trump told Americans that the risk of coronavirus was still “very low” and appointed Vice President Mike Pence to lead the US response to the impending global health crisis .
Bianco said he fears that many investors will remain pleased with how quickly the number of cases could multiply in the United States, as it has done in countries such as Iran, Italy and South Korea.
He is recommending his clients to step on lightly until the full extent of the outbreak is known.
“I prefer to risk losing an opportunity to be out of the market or underweight and discover that this is not a big problem, to invest completely and worry about this getting worse,” Bianco said.
“AMOUNT RISK TREMENDA”
Others are concerned about the consequences if the United States were forced to implement a blockade similar to that imposed by the Chinese authorities in the province of Hubei, the epicenter of the coronavirus outbreak.
Wuhan, the capital of Hubei, imposed strict controls on the movement of residents, then relieved them and then announced that the relaxation had been revoked. Such measures could be more difficult to apply in the United States.
“Those of us who are sitting here in Hong Kong looking at financial markets believe that there is a huge risk in the system,” said Simon Powell, a stock strategist at Jefferies in Hong Kong.
Powell is particularly concerned that the virus can spread to people from countries outside of China who are not subject to travel restrictions upon entering the United States. He is particularly concerned about the outbreak in Iran.
Iran said Thursday that its death toll from coronavirus had increased to 26, by far the largest number outside of China. The mortality rate among confirmed cases of the virus has been around 10% in Iran compared to about 3% elsewhere.
Powell also believes that a Trump administration is unlikely to choose a reduced economic activity, and writes in a recent research note that “our base case hypothesis is that a Trump government is unlikely to choose a reduced economic activity and the interruption of the supply chain, so the spread of the virus, if it arises in the United States, would be more likely. ”
Others have pointed out what they believe are shortcomings in the CDC approach.
“The initial response from the US has been aimed at generating a response to confirmed high-risk or infected cases, not aimed at more generalized public health containment,” said Wouter Jongbloed, chief of policy and risk analysis at Exante, based in New York. Data.
Since the coronavirus spread well outside of China, the CDC tests “were probably not effective enough to prevent a potential outbreak in the United States,” Jongbloed said.
Megan Davies report; Additional reports by Ira Iosebashvili; Edition by Daniel Wallis