CDC Warning, New Europe Cases Rattle Investors: Virus Update

The U.S. Centers for Disease Control and Prevention warned Americans to prepare for a potential coronavirus outbreak at home, while more cases in Europe sparked concern of a widening outbreak on the continent.

The news sent U.S. stocks tumbling for a fourth straight day and pushed the yield on the benchmark 10-year Treasury note to a record low. U.S. airlines posted the biggest two-day drop in 17 months on fears that travel will be further stymied.

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 it could limit the impact, as new cases continued to be identified elsewhere in Asia.

Key Developments

  • China death toll 2,663; total mainland cases at 77,658
  • Italy cases rise to 322; Austria reports two infections
  • Gilead drug being tested on cruise ship evacuees in Nebraska

Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts. For analysis of the impact from Bloomberg Economics, click here.

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Shiseido Tells Japan Staff to Work From Home: Nikkei (6:43 a.m. HK)

Shiseido Co. will tell 8,000 staff in Japan to work from home starting Wednesday until March 6, amounting to 30% of their domestic work force, Nikkei reported, without attribution. The Japanese cosmetics company’s factory and retail workers will still go to work.

The report follows a decision on Tuesday by Dentsu Group Inc., Japan’s largest advertising agency, to have workers at its Tokyo headquarters to work from home after an employee tested positive for the coronavirus.

Olympics Have Reserve Fund for Canceled Games (6:37 a.m. HK)

As the International Olympic Committee looks ahead to the Summer Games in Tokyo with trepidation, it does have something that could cushion the blow in case of cancellation: a $897 million reserve fund to help finance global sports.

The scenario is drawing more consideration as the coronavirus continues to spread around the world. A number of global sporting events and Olympic qualifiers have been canceled, and many are now wondering how the outbreak might effect the games that start at the end of July.

For now, the Olympic movement is moving forward with its plans for Tokyo. The U.S. Olympic & Paralympic Committee has suggested a limit on all nonessential travel to China, Hong Kong and Singapore, but has informed its teams to continue training and preparing as planned.

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.

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.

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