The real problem with Donald Trump is that he keeps yapping about the markets with his own convoluted conventional wisdom that argues the stock market's success is derived from his own policies. Trump thinks he's a stock analyst yet fails to realize the concept of earnings. The coronavirus will impact earnings in every quarter this year and will potentially drag on to next year. Trump's only motive is to go on Twitter and calm the markets down by eliciting that the coronavirus is contained not only in China, but in the United States as well.
With the rise of globalization, the coronavirus is appearing in more countries and rapidly spreading to other countries that were once deemed "not a threat". It's affecting their economic stability and their perception in avoiding the virus completely. The significant adverse affect of the coronavirus will diminish exports, imports, and tourism. However, the human economic behaviour patterns may not compensate other areas of the economy for the loss derived from revised gross domestic product estimates.
The economic sectors which involve the movement of people and the interaction of people are the most severely impacted. Border closures are likely to be ineffective and screening may only detect those who are in a certain stage of the virus. China prides itself by building a hospital in ten days and are always the first to advocate their national pride in doing so. The truth is that it clearly demonstrates a lack of funding in their healthcare system. By now, China has its back against the wall and feels viscerated by the United States. They declared that the US is in an "all-out war" in bringing down the world's second-biggest economy and that they should stop "smearing" China.
It looks like China simply doesn't want to be the third-largest economy by losing out to Japan. China even accused the "western world propagandists" of isolating China from East Asian nations which they argued hampered their economic growth. With certain US sanctions still in place, it is only reasonable that the US administration will impose additional sanctions on Chinese companies investing in Iranian energy. US energy companies were elated with the Phase One trade deal between China and the US. China committed billions of dollars of energy and agricultural products to soak up their oversupply. Unfortunately, this came to pass when the coronavirus came into the scene and forced China to rethink the bad trade deal they made with the US.
That's why China's Foreign Minister, Wany Yi, abruptly said that China would keep up its end of the bargain in hopes that the US would deliver upon its commitments to China. Putin added his two cents, "We deliver 38 billion cubic metres of gas per year, constituting a huge volume, even more can be pumped. We have them, we have China, this is an absolute natural partner for us." The real term we can use to describe geopolitics today is that it's a dog-eat-dog world of predatory advantage.
Many stock analysts see the coronavirus as an opportunity as long as they don't get the disease. Many feel that the markets are too lofty and that any bad news is good news for a market pullback to profit from. This will enable the central bankers to lower interest rates and continue quantitative easing by purchasing riskier financial assets to pump the market with more crack-cocaine.
Developing countries are looking at China and may conclude that reporting these outbreaks derive fewer economic benefits than keeping them concealed. The reason why is because it leads to deleterious social economic consequences. In developing countries, it will be difficult to get an accurate grip of the disease pyramid and the percentage of the population who go to the market to seek healthcare or even have the means to obtain healthcare. So far, the markets can not determine how widespread the virus really is in developing countries and its ability to spread. Can we really identify the mass population without symptoms such as fever? No, and this results in catastrophic economic deterioration along with the confidence that is arbitrarily keeping the market at a higher level.
If the infection is mild, are there enough healthcare resources in developing countries to contain it? In China, 3000 hospital staff were infected with the virus. This clearly illustrates the healthcare vulnerabilities in China. Xi Jinping, the leader of China, has the audacity to call these individuals martyrs and heroes. Ask yourself how many martyrs and heroes Trump will identify when they're dead.
Donald Trump only cares about the stock market and getting rid of Jerome Powell, head of the Federal Reserve, while eating his hamburgers and simulatenously destroying the confidence of the American people. As I indicated before, he is not a stock analyst nor a virologist who understands the nature of a virus. Wall Street is sick and tired of his lies. It was Trump that formulated his success with the stock market.