Coronavirus update: China's death toll crosses 2,000 amid widening fears for the economy

Anjalee Khemlani
Senior Reporter

China remained in crisis mode on Wednesday over its coronavirus outbreak, with the country’s casualty count reaching a deadly new milestone at over 2,000.

The number of confirmed cases in the world’s second largest economy have now surpassed 75,000. The number of cases in the U.S. jumped to 29, after coronavirus-infected evacuees from the Diamond Princess cruise ship in Japan were flown home.

Meanwhile, Adidas (ADDYY) and Puma (PMMAF) joined a growing list of companies that are warning about the business impact from the outbreak. As major air carriers and multinational organizations curtail operations in China, the International Monetary Fund warned on Wednesday that the virus’ spread may undermine a "highly fragile" environment for global growth.

“This is going to have supply chain issues for a longer period of time than one quarter,” Raymond James analyst Chris Meekins told Yahoo Finance’s “The First Trade” on Wednesday.

Adding that the U.S. is “not completely out of the woods” — along with Japan and Singapore who could all still see a rise in infections — Meekins suggested that markets are underestimating the impact of the virus.

Markets and the economy

Stocks posted their best day in nearly a week on Wednesday, as the slowing rate of infections in China gave investors cause for hope. Yet the impact on businesses — including Apple (AAPL), which shook Wall Street this week with its warning about the upcoming quarter — and the mysterious nature of the virus helped cap gains.

Adidas and Puma joined the growing list of companies suffering from the hit to supply chains and demand. The footwear giant said sales have fallen by 85% since the start of the year, while Puma said fewer tourists in Asia is likely to impact their quarter.

On Tuesday, Kevin Simpson, Capital Wealth Planning founder and CEO, told Yahoo Finance it could spillover into Q2 earnings.

“I certainly think its a Q1 event, it wouldn’t surprise me to see it affect the second quarter as well,” he said. “We have the second-largest economy in the world essentially closed for business.”

The outbreak is also curbing imports to China, as the quarantine has reduced the amount of labor available at ports to unload frozen meats and produce from other countries. Separately, the U.S. is also seeing a growing impact on its food exports, as California’s lobster industry has seen demand all but dry up.

“Localities in mainland China with low infection statistics or those that are relatively more confident in keeping the outbreak under control will probably allow businesses to return to normal rapidly, possibly within Q1 2020,” analysts at IHS-Markit on Wednesday.

“There would be a strong political incentive for local governments to resume business activities, assuming that they have contained the outbreak,” the firm said.

“However, the lifting of all travel restrictions and full resumption of normal operations are unlikely unless there are no new cases nationwide for at least two weeks – the most recent estimated disease incubation period,” it added.

This week, finance ministers and central bankers from the top 20 advanced industrialized economies will gather in Riyadh, Saudi Arabia, as policymakers grapple with the uncertainty generated by the coronavirus, also known as COVID-19.

Fears of a global pandemic have already walloped crude (CL=F), which is down nearly 13% year to date despite a brisk rally this week.

Around the world

The World Health Organization did not hold a daily briefing on the coronavirus Wednesday, just as China released new information of how it was counting cases.

A nearly 15,000 jump in cases last week shocked markets as China changed the definition of confirmed cases to include those done by CT scans, but did not provide a timeline of how far back the count was introduced from.

In a press conference in Hubei province Tuesday, officials noted that there continued to be pressure on food supplies and protective wear, such as face masks, and little is still understood about the transmission of the virus.

“The virus transmission route is still unclear, and the symptoms of some cases are not obvious and concealed,” one official said, according to a Google Translate of the statement.

Anjalee Khemlani is a reporter at Yahoo Finance. Follow her on Twitter: @AnjKhem

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