Good morning. David Meyer here in Berlin, filling in for Alan.
The novel coronavirus has reached Germany, brought here by an employee of an automotive parts supplier that has a location in Wuhan, the virus’s epicenter and a major hub for the auto and steel industries. The employee infected a coworker at the firm’s Bavarian headquarters. It’s among the first cases outside China in which someone infected another person who is not their relative—a Japanese tour bus driver seems to be another similar case.
The German supplier in question, Webasto, has banned all travel to and from China over the next couple weeks. Carmakers including Honda, Nissan and PSA Group are pulling their employees from the country. Outside that sector, Facebook, LG and port operator DP World are among the companies telling workers not to travel to China.
Three regions in Russia’s far east have closed their borders with China, and Hong Kong has suspended high-speed rail and ferry services to the mainland (a move that may or may not mollify those calling for a strike over the city’s inadequate response to the crisis).
The sense of panic was palpable in the markets yesterday, with the Dow and S&P 500 shedding 1.6%, the Nasdaq 1.9%, and Europe’s Stoxx 600 2%. Airlines and luxury firms, with their big exposure to China, are getting hammered. So far this morning, European shares have sunk into the red after a brief rebound, but U.S. futures are looking mildly positive, suggesting an end to the first five-day losing streak the Dow has experienced since August last year.
With the Chinese death toll now standing at 106—the first life has been claimed in Beijing—Asian markets continue to tumble. South Korea’s KOSPI is down 3.1%, Australia’s ASX is 1.4% lighter, and the Nikkei has lost 0.5%. Chinese mainland markets are at least closed this week, but economists are warning of a “significant” impact on the country’s economic growth this quarter.
Still, it’s worth noting that the World Health Organization says it is confident in China’s ability to contain the coronavirus. According to state news agency Xinhua, WHO chief Tedros Adhanom Ghebreyesus does not think countries should be evacuating their citizens from China, as some—France, South Korea, Germany, Japan—are starting to do.
So keep your eyes fixed on the rate of the virus’s spread. The official number of infections in China now stands at 4,500, up 45% on yesterday.
More news below.