Dow futures drop about 700 points
U.S. stock market futures sank Monday as the spread of coronavirus raised worries that global economic growth could take a hit. Authorities in northern Italy canceled some public events, including Venice’s Carnival, in an effort to reduce the spread of the virus. Italian officials said Sunday they have 152 confirmed cases, the most in any country outside Asia. European stock markets fell sharply at the open, with the FTSE MIB Italy index I945, -4.10% slumping over 4%. South Korea reported 70 more cases and Iran said the death toll from the city of Qom is 50.
On Saturday, the International Monetary Fund warned the virus outbreak could reduce global economic growth by 0.1% this year, and drag China’s annual growth 0.4 percentage points lower than January estimates.
“The world economy is facing a clear slowdown and this slowdown might be reinforced by the so-called coronavirus,” French Finance Minister Bruno Le Maire said at a G-20 finance meeting in Saudi Arabia, according to the Associated Press. But U.S. Treasury Secretary Steve Mnuchin said Sunday that it was still too early to tell how the outbreak will affect the global economy. “I think we’re going to need another three or four weeks to see how the virus reacts, until we really have good statistical data,” he told CNBC.
Still, the global spread of the virus in patients with no links to China suggests “things are about to get extremely problematic, and market conditions could get exponentially worse this week,” Stephen Innes, chief market strategist with AxiTrader, wrote in a note Sunday.
More than 760 people in South Korea have been infected, with most of the diagnoses coming in the past few days. Under the new alert level, the government has the authority to order schools to be closed, stop public transportation and to cut off flights to and from South Korea. China’s President Xi Jinping on Sunday noted the outbreak news was “grim,” but said measures must be taken to get China’s economy going again, including reopening factories in low-risk areas. Experts forecast as much as a 1% reduction in China’s economic output this quarter due to strict quarantines that shuttered businesses and factories. Nick Note: Remember me? i am the guy as those assholes on Wall Street rallied the market told you to sell the shit out of it.