(Bloomberg) -- The U.S. Centers for Disease Control and Prevention warned Americans to prepare for a coronavirus outbreak at home that could lead to significant disruptions of daily life, though the warnings were downplayed by the White House. Congress was told that there’s shortage of masks needed for health workers if one occurs.
New cases were reported in Europe, prompting worries of a widening outbreak there. Iran reported a total of 15 deaths, the most fatalities outside China, and a top health official tested positive. Chinese President Xi Jinping said his country was confident of limiting the impact, though new cases continue to be identified elsewhere in Asia.
Stocks fell and bonds rose as worries mounted in the market over the virus. Airline stocks were hit particularly hard.
Key Developments
- China death toll 2,663, up 71; total mainland cases at 77,658
- Italy cases rise to 322; Austria reports two infections
- United Air abandons profit goal, Mastercard (NYSE:MA) cuts forecast
- U.S. stocks head for a fourth straight decline; bond yields fall
Airline Stocks Fall Over Concerns on Travel Impact (4 p.m. NY)
U.S. airlines posted the biggest two-day drop since 2016 on worsening fears that the spread of the coronavirus will further stymie travel.
American Airlines (NASDAQ:AAL) Group Inc. led the decline, tumbling to the lowest since its 2013 merger with US Airways. President Donald Trump’s administration is considering whether to adopt more restrictions on air travel because of the outbreak, White House economic adviser Larry Kudlow said Tuesday.
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Kudlow Urges Calm After CDC Virus Warning (1:40 p.m. NY)
White House economic adviser Larry Kudlow called for calm after U.S. health officials said that an outbreak inside the U.S. could cause significant disruptions to daily life if emergency plans were put into place.
“I think people should be as calm as possible in assessing this,” Kudlow said at the White House. “Emergency plans don’t necessarily mean they’ll have to be put into place.”
There have been fewer than 20 coronavirus cases diagnosed in the U.S., though the Centers for Disease Control and Prevention has said it expects the pathogen to eventually spread locally.
“We have contained this, I won’t say airtight, but pretty close to airtight,” Kudlow said. He called it a human tragedy because of the toll in China, but said it was not an economic one.
Cases Grow in Italy and Across Europe (1:02 p.m. NY)
Italy saw its 10th casualty from the coronavirus outbreak, with 322 confirmed cases nationwide, as the infection began to appear across Europe and threatened to further disrupt tourism and business. Health ministers in Germany, France, Italy and other neighboring countries vowed to keep Europe’s borders open and to improve information-sharing about travelers to and from areas with infections.
Spain’s authorities held about 1,000 guests and workers at a seaside hotel on Tenerife, in the Canary Islands, after an Italian tourist there initially tested positive for the virus. Croatia and Switzerland reported their first cases, and Austria confirmed two more. All the patients had links to Italy.
CDC Warns Americans to Prepare for Outbreak (12:53 p.m. NY)
The Centers for Disease Control and Prevention said Americans should prepare for school closings, cancellations of sporting events, concerts and business meetings if the coronavirus spreads in the U.S.
“We expect we will see community spread in this country,” Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases, said on a call with reporters Tuesday. “It is not a matter of if, but a question of when, this will exactly happen.”
The outbreak is “rapidly evolving and expanding,” she said. “Now is the time” for businesses, schools and hospitals to begin preparing. She said that Americans should prepare for the coronavirus epidemic on our shores and to assume it will be bad.
U.S. Is Short on Masks in Case of American Outbreak (11:30 a.m. NY)
The U.S. has far fewer protective masks than it would need in the case of a major outbreak of the coronavirus in the country, Health and Human Services Secretary Alex Azar told Congress Tuesday.
The U.S. has about 30 million stockpiled N95 masks that can help stop a person from inhaling infective particles, Azar said, but would need as much as 300 million for health workers in an outbreak. U.S. health officials have said they’re preparing for the coronavirus to eventually begin spreading locally.
Gilead Drug Being Tested on Evacuees in Nebraska (11:20 a.m. NY)
Gilead’s antiviral drug remdesivir will be tested on coronavirus patients at the University of Nebraska Medical Center, which is housing people who were evacuated from a virus-infested cruise ship in Japan, the National Institute of Allergy and Infectious Diseases said.
Although remdesivir has been administered to some patients with the virus, “we do not have solid data to indicate it can improve clinical outcomes,” said Anthony S. Fauci, director of the institute, said in a statement.
The first trial participant is an American who was repatriated from the Diamond Princess cruise ship that docked in Japan. So far, 11 of the 13 patients who were repatriated from the ship to the Nebraska hospital have been confirmed to have the coronavirus.
Remdesivir is also being tested in trials in China and Japan, said U.S. Heath and Human Services Secretary Alex Azar at a Senate hearing Tuesday.
Pompeo Criticizes China, Iran Reponse (10 a.m. NY)
U.S. Secretary of State Michael Pompeo criticized China and Iran’s response to the coronavirus, saying that suppression of information about the infection may have made the outbreak worse or put other countries on the back foot.
“The United States is deeply concerned that the Iranian regime may have suppressed vital details about the outbreak in that country,” Pompeo said at a press conference in Washington. At least 15 people in Iran are dead, authorities there have said, though there are reports of higher numbers and hundreds of potential cases.
Pompeo also criticized Chinese authorities, after the government said it would expel three Wall Street Journal reporters. In the province of Hubei, where the outbreak began, some early warnings of a new virus were initially suppressed.
“Expelling our journalists exposes once again the government’s issue that led to SARS, and now the coronavirus -- namely censorship. It can have deadly consequences. Had China permitted its own and foreign journalists and medical personnel to speak and investigate freely, Chinese officials and other nations would have been far better prepared to address the challenge.”
Senators Say Administration May Request More Virus Funds (9:45 a.m. NY)
Several U.S. senators emerging from a classified briefing on Capitol Hill Tuesday said they expected the Trump administration to ask for more money to combat a potential coronavirus outbreak, depending on how the situation plays out in the U.S.
Senators were told, “Let’s see how it evolves and then we can put more dollars in,” said Bill Cassidy, a Republican from Louisiana. The administration has requested $2.5 billion -- half new money, half repurposed from other efforts -- from Congress to deal with the virus.
U.S. Will Test Experimental Gilead Drug in NIH Trial (8:44 a.m. NY)
The U.S. government will oversee an international trial of Gilead Sciences Inc (NASDAQ:GILD).’s experimental drug remdesivir, which is already being tested in China as a potential treatment for the coronavirus there.
The trial is being run by the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, and seeks to sign up about 400 people in the U.S. and at foreign sites. It’s expected to be completed by April 1, according to information about the trial posted on the ClinicalTrials.gov registry.
Drugmakers and governments are working on vaccines and therapies to use against the virus. On Tuesday, the U.S. drug developer Vir Biotechnology Inc. and Shanghai-based WuXi Biologics announced they would work together to find other potential new therapies.
China Pledges Cheap Credit, Tax Cuts to Aid Small Firms (7:50 a.m. NY)
The People’s Bank of China will offer $71.2 billion of relending and rediscounting funding to commercial lenders for loans to small companies and the agricultural sector, Central China Television reported.
Catastrophe Bonds Signal Virus Nearing Pandemic Status (7:49 a.m. NY)
The World Health Organization says the coronavirus isn’t yet a global pandemic. Bonds that insure against just such a catastrophe say that it probably is. The bonds, sold in 2017 by the World Bank to raise money for poor countries in a global pandemic, are quoted as much as 40% below their face value following coronavirus outbreaks in countries such as Iran and Italy, according to investors who own the securities.
Moderna Rallies on Quick Vaccine Turnaround (7:33 a.m. NY)
Moderna Inc., the biotechnology company developing an experimental coronavirus vaccine in collaboration with the U.S. government, said it shipped a first batch of the inoculation to begin human testing. The stock jumped as much as 25%.
The experimental vaccine was sent to the U.S. National Institute of Allergy and Infectious Diseases and is to be used in an early stage study to test its safety. It will likely take months of testing to determine whether or not the vaccine can successfully stop infections, and more time to roll it out if it does work.
Top Iranian Health Official Tests Positive (7:32 a.m. NY)
A top Iranian health official has been diagnosed with coronavirus in another sign the disease may be spiraling out of control in the country. Iraj Harirchi, a deputy health minister who has been the face of the government’s campaign against the virus, said he tested positive for it late Monday, the day he gave a press briefing on efforts to combat the outbreak.
Separately, Tehran lawmaker Mahmoud Sadeghi tweeted that he had tested positive. Sadeghi is a prominent reformist who was barred from participating in the latest parliamentary elections.
Earlier on Tuesday, Iran reported 34 new cases, with the death toll rising to 15. Bahrain reported nine new cases, while Kuwait has an additional three and Oman another two. So far, there are about 140 confirmed cases in the Middle East, all of them linked to Iran.
The U.A.E. has banned travel to all cities in Iran and has already suspended all flights to and from China, except Beijing. Kuwait, which has already stopped flights to Iran, on Monday suspended travel to South Korea, Thailand, Italy and Iraq. Separately, a Turkish Airlines flight from Tehran bound for Istanbul made an unscheduled landing in Ankara, according to Turkey’s Haberturk television.
Italy Infections Rise, Austria Reports Two Cases (7:00 a.m. NY)
Italy reported 283 cases, up from 229. The death toll was unchanged at seven.
Separately, Austria confirmed two cases, APA said. Croatia reported its first case earlier on Tuesday -- a man who recently returned from Milan in Italy has mild symptoms and was hospitalized in Zagreb.
Tenerife Hotel in Lockdown (6:25 a.m. NY)
An Italian staying on the Spanish island of Tenerife tested positive for the virus and a second test to confirm the case will be carried out in Madrid, the government said. The case would be Spain’s third and the first on the island. Tenerife, the largest of the Canary Islands, attracted more than 5.7 million tourists last year.
The tourist, a doctor, had come from Lombardy, a region of northern Italy that is a focus of an outbreak of the virus, Efe news service reported. Spain’s two previously confirmed patients no longer have the infection.
About 1,000 guests and hotel workers won’t be able to leave pending definitive results of the test expected later on Tuesday, a person familiar with the situation said.
Luxury Sales Could Drop by $44 Billion (6:20 a.m. NY)
A survey showed that industry executives expect a severe fallout from the coronavirus. The impact of the outbreak is likely to reduce industry sales by as much as 40 billion euros ($43.5 billion) in 2020, according to the survey of 28 top executives undertaken by Boston Consulting Group and Sanford C. Bernstein. China is a key market for most luxury firms, and signs that the virus has been spreading more widely are causing jitters to increase.
Sino Biopharm Drug Included in China Guidelines to Treat Virus (6 a.m. NY)
A drug developed by a subsidiary of Sino Biopharmaceutical was put in Chinese government guidelines as a supportive treatment for mild and common cases of coronavirus infection. The drug, Magnesium Isoglycyrrhizinate, has the brand name Tianqingganmei.
Singapore to Ban Visitors from Daegu, Cheongdo (6:41 p.m. HK)
Singapore will ban all short-term visitors with recent travel history to Cheongdo county and Daegu city, which are central to the coronavirus outbreak in South Korea, effective Feb. 26.
Earlier, the U.S. Centers for Disease Control and Prevention warned Americans to avoid all non-essential travel to South Korea. The level 3 warning, the CDC’s highest, matches the caution it previously placed on China. The CDC previously issued lower-level alerts for Italy, Iran and Japan, telling travelers to take extra care and consider postponing non-essential travel.
Beijing ‘Getting it Under Control,’ Trump Says (6:29 p.m. HK)
President Donald Trump said U.S. markets “took a hit yesterday” because of concerns surrounding the coronavirus, but said Beijing was “getting it under control more and more.”
Trump, said he believed things would “work out fine” in the U.S. and that his administration was “spending a tremendous amount of money” to prevent the spread of the disease and assist other countries. He noted the White House had requested $2.5 billion in supplemental funds to fight the virus.
Chinese Cities Curb Travel From Other Countries (6:28 p.m. HK)
Some Chinese cities have begun to restrict arrivals from overseas, as growing outbreaks elsewhere prompt the country to enact curbs similar to those facing its own travelers. The moves signal that the epidemic’s momentum has shifted outside of China.
The coastal city of Weihai said all people arriving from Japan and South Korea would be required to undergo 14-day quarantines in designated hotels. The adjacent city of Yantai said those who’ve entered China for short-term business and tourism visits would be required to stay in selected hotels.
China customs is closely monitoring the coronavirus epidemic in other countries.
HK Leader’s Approval Rating Plunges (6:16 p.m. HK)
Carrie Lam’s approval rating has sunk to a new low of just 9.1% as her government faces criticism over its handling of the coronavirus outbreak. The government has come under fire from some groups for not doing enough to ward off a public health crisis as the number of confirmed virus cases continues to climb. The virus first emerged in central China in December, piling pressure on Lam after months of often-violent demonstrations in Hong Kong.
Singapore Eases Rules for Chinese Workers in More Sectors (6 p.m. HK)
Singapore will loosen restrictions on Chinese work-permit holders in the country to help businesses in manufacturing and services industries that have been hit by labor disruptions during the coronavirus outbreak.
For six months beginning March 2, the Ministry of Manpower will allow companies in those sectors to hire Chinese workers who are already in the country, with the agreement of their existing employers. Currently, businesses can only hire Chinese work-permit holders once they have left Singapore.
Thailand’s Tourism Income Tumbled in January (5:55 p.m. HK)
A slump in Thailand’s foreign tourism income underlines the damage being inflicted on its economy. Receipts tumbled 3.6% in January from a year earlier to $6 billion), dragged down by a 10% slide in outlays by Chinese visitors.
HK Exports Slid Most in Decade in Jan. Ahead of Virus (5:26 p.m. HK)
Hong Kong’s exports plummeted the most in more than a decade in January, as the government warned of further weakness in the coming months with the full force of disruptions from the coronavirus outbreak still ahead. Exports sank 22.7% in January from year-ago levels to HK$269.4 billion ($34.6 billion), the most since February 2009.
European Corporate Bond Market in Deep Freeze (4:50 p.m. HK)
Global borrowers shunned Europe’s corporate debt market for a second day as a cluster of new coronavirus cases in Italy sent yields sharply higher, bringing sales of new bonds to a near standstill.
ING Groep’s downsized debt offering is the only deal priced so far this week, which had been expected to deliver more than 20 billion euros ($22 billion) of sales, according to a Bloomberg News survey. Non-financial borrowers are nowhere to be seen, with Spain the only sovereign issuer braving the market so far on Tuesday.
Gilead’s Drug Leads Global Race for Treatment (3:40 p.m. H.K.)
China will release results on April 27 of a clinical trial of Gilead Sciences’s remdesivir drug that the World Health Organization said may be the only effective treatment so far for the disease. The trials of the experimental medication involved 761 patients in Wuhan, the city where the virus originated.
