Archives of “January 2020” month

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11 Wuhan residents traveling back from abroad were found infected with the coronavirus

  
  Analysis
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The Global Times conveying the report citing China customs

  • 11 Wuhan residents traveling back from abroad were found infected with the novel coronavirus as of 6 am Tuesday
Well, that’d suck.
So, its probably reasonable to say that some of these folks (likely all of them) headed away from Wuhan while inflected but not showing any symptoms, and by the time they returned began to show symptoms (fever, for example).
Its probably also reasonable to think they have infected others while away.

Warning on the potential for a recession due to the coronavirus – a critical ‘cushion’

  
Analysis, Economy
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Stephen Roach warns on the potential for the coronavirus outbreak to shock the world in a recession

  • Historically, the rapid expansion of cross-border trade has been an important part of the global growth cushion that shields the world economy from all-too-frequent shocks. 
  • Now, however, reflecting the unusually sharp post-crisis slowdown in global trade growth, this cushion has shrunk dramatically, to just 13% over the 2010-19 period. With the world economy operating dangerously close to stall speed, the confluence of ever-present shocks and a sharply diminished trade cushion raises serious questions about financial markets’ increasingly optimistic view of global economic prospects.
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Who is Roach?
  • a senior fellow at Yale University’s Jackson Institute for Global Affairs
  • a senior lecturer at Yale School of Management
  • formerly chairman of Morgan Stanley Asia and chief economist at Morgan Stanley
Stephen Roach warns on the potential for the coronavirus outbreak to shock the world in a recession

Check this out to put the coronavirus impact into perspective

  
  Analysis
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This is one perspective, there will be others.

  • When the SARS epidemic hit in 2003 China had an economy size aroiund USD 1.7 tln
  • Today it is nearly an order of magnitude larger, around USD 13.7 tln
  • & China’s economy accounts for around a third of global GDP growth

ps.  this from Apple’s Tim Cook on what is happening with his business in China this week:

  • “We have closed one of our retail stores and a number of channel partners have also closed their store fronts. Our sales within the Wuhan areas are small, but retail traffic has also been impacted cross the country (China) in the last few days.”

Bolding mine.

Multiply the impact on traffic to Apple stores across the economy.

china coronavirus

Apple EPS for Q1 $4.99 versus $4.54 estimate

  
  Analysis

Apple 1Q 2019 earnings

  • EPS $4.99 vs $4.54 estimate
  • Revenues $91.8 billion vs. $88.40 billion estimate
  • service revenue $12.72 billion versus estimate of $12.98 billion
  • sees a 2nd quarter revenue of $63.0 billion to $67.0 billion versus estimate of $62.33 billion
  • iPhone revenues $55.96 billion versus estimate $51.5 billion
  • first-quarter wearables and home accessories $10.01 billion versus estimate $9.51 billion
  • Apple sees a 2nd quarter gross margins 38% to 39% versus estimate of 38.1%
  • Apple active install base hits 1.5 billion
  • Mac revenue $7.2 billion versus 7.15 billion estimate
  • iPad revenues $5.98 billion versus $6.7 billion estimate

Apple shares close the session at $317.69. It is currently trading at $327.25 in after-hours trading. That is a new record high.

Tim Cook will talk about the supply chain issues as a result of the China coronavirus in his call.

In after hours volatile trading the stock is trading at
Tomorrow, Tesla, McDonald’s, Microsoft, Boeing, and Facebook report earnings. On Thursday, UPS, Amazon, Coca-Cola, Electronic Arts, and Biogen will release.

Pres. Trump proposes 2 state solution for Israel and Palestinians

  
Analysis, Politics
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Mideast peace plan from Pres. Trump

  • Pres. Trump proposes 2 state solution for Israel and Palestinians with Palestinian capital in east Jerusalem
  • Israel has agreed to negotiate on the basis of a detailed proposed the map
  • Israel agreement on statehood for Palestinians is dependent on security arrangement to protect Israelis
  • Israel respect historic role of Al-Aqsa mosque and Jordan’s role with regard to holy sites with the aim of allowing Muslims to visit mosque
  • Palestinian state hold is dependent on Palestinians respecting human rights, freedom of the press, and having a transparent and credible judiciary
  • Israelis West Bank settlements would be recognized by the United States
  • in exchange for Israel’s agreeing to the proposed map, the US will recognize the map
  • Israeli would agree to 4 year freeze on settlement activity while Palestinian statehood negotiated
  • we bought 4 more years for Palestinians to get their act together and negotiate state
  • question for Palestinians. The question is is will they come to the table and negotiate
  • if Palestinians agree to negotiate there are some areas that can be compromised in the future
  • proposed Palestinian state would be connected with roads, bridges and tunnels with connectivity between Gaza and West Bank
  • Trump plan calls for Palestinian refugees to be able to return to a future state of Palestine and creates generous compensation fund.
Israel and Palestinian talks broke down in 2014.  US officials are bracing for initial Palestinian skepticism, but hope that over time they will agree to negotiate.
US plan represent the most dramatic and detailed attempt to break the historic deadlock. The Palestinians are skeptical as they say the US administration is biased toward Israel.

World Health Organization to send international experts to China as soon as possible

  
  Analysis
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World Health Organization on China

The World Health Organization is on the wires saying:
  • WHO has agreed with China that they would send international experts to China as soon as possible to boost understanding and guide global response to the coronavirus outbreak
  • WHO says a better understanding of the transmissibility and severity of the virus is urgently required to guide other countries on appropriate measures
  • It can reconvene its emergency committee on coronavirus on very short notice as needed. Its members are on standby and being informed of developments

What’s wrong with the picture if the World Health Organization has to pander to China during a potential buyers outbreak?

European major indices end higher on ebbing fears

  
Analysis, Global Indices

German DAX +0.83%. France’s CAC, +1.08%

The major European indices are ending the day higher as having fears of the coronavirus lead to risk on flows.
  • German DAX, +0.83%
  • France CAC, +1.08%
  • UK’s FTSE 100, +0.95%
  • Spain’s Ibex, +1.25%
  • Italy’s FTSE MIB, +2.2%
In the European debt market, the benchmark 10 year yields are mostly higher with the exception of the Italian 10 year which fell by a modest -1.0 basis point
German DAX +0.83%. France's CAC, +1.08%_
In other markets:
  • Gold is currently trading down $-12.72 or -0.8% at $1569.50. The low price reached $1567.50
  • WTI crude oil futures are up $0.61 or 1.17% at $53.75
US stocks are trading near high levels for the day and up smartly:
  • S&P index, +1.05%
  • NASDAQ index, +1.34%
  • Dow up 0.79%
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