Coronavirus Spreads Outside China. Chains of COVID-19 infection in secondary and tertiary countries are posing increasing risks globally. South Korea saw a massive spike in its total infections through the week of Feb. 17 in Daegu, the country’s fourth-largest city.
Veteran market observer Josh Brown does not think the effect is reflected in current stock prices. A case or two in New York would change that quickly, he suggests.
Here are some headlines and point of information that I have collected last week. I believe that the price of the market does not reflect the seriousness of this situation.
- South Korea reports 123 new cases, 1 new death
- Italy announces 79 cases, declares “national emergency”; Nothern Italy put on lockdown.
- Japan cases triple in a week to 121
- Japan confirms “seriously ill” patient in Tokyo
- Hubei reports daily numbers
- Chinese scientists find virus in urine
- Experts propose 27 day quarantine, say 14 days likely not long enough
- Cases outside China go exponential
- 32 UK and European citizens arrive back in UK on evac flight
- Outbreak reported in South Korean psychiatric ward
- WHO team visits Wuhan; will give Monday press conference
- Iran reports 10 new cases, deaths climb to 6
- San Diego says 200 under ‘medical observation’
- Young woman infected five relatives without ever showing symptoms
- South Korea cases surge 8-fold in 4 days to 433; country reports third death
Global Spotlight
Afghan Peace Talks. The United States and the Taliban are set to sign a peace agreement in Doha, Qatar, on Feb. 29 following a tentative week of reduced hostilities starting Feb. 22. U.S. Secretary of State Mike Pompeo said that intra-Afghan talks to reach a more comprehensive peace agreement would come “soon thereafter.”
Iran’s Nuclear Program. The International Atomic Energy Agency is expected to release a report next week covering Iran’s nuclear program. It will be closely watched as Iran announced that it would no longer respect limits to its uranium enrichment program in January following a continuation of the U.S. sanctions campaign.
Argentina’s Debt Crisis. After the International Monetary Fund declared that Argentina’s debt is “unsustainable,” a delegation of investment funds and banks owning around 40 percent of the country’s private debt will arrive in Buenos Aires on Feb. 27. Argentina is expected to ask them for a 30 percent haircut on its debt’s capital, plus a three-year “grace period” without debt repayments.
Discussion of New Curbs on Exports to China Still Set. Despite President Donald Trump tweeting this week that he wanted the United States to be “open for business” and that national security reasons shouldn’t be used as an excuse to prevent U.S. companies from selling to foreign countries, a deputy-level Cabinet meeting will be held Feb. 28 to discuss additional restrictions on exports to China.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
Earnings
Source I/B/E/S data from Refinitiv
Aggregate Estimates and Revisions
- Fourth quarter earnings are expected to increase 3.2% from 18Q4. Excluding the energy sector, the earnings growth estimate is 6.1%.
- Of the 437 companies in the S&P 500 that have reported earnings to date for 19Q4, 70.5% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four quarter average of 74%.
- 19Q4 revenue is expected to increase 5.1% from 18Q4. Excluding the energy sector, the growth estimate is 6.3%.
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A must-read article for this week, it would be Warren Buffett’s annual letter. Enjoy.
