- Dow Jones Industrial Average (DJIA) futures bounce back after yesterday’s brutal 1,000 point plunge.
- Harvard professor says the coronavirus likely can’t be contained and could infect more than half the world’ population.
- The impact on global GDP could be more than $1 trillion.
After the worst selloff in two years, the U.S. stock market looks poised for more pain on Tuesday. Dow Jones Industrial Average (DJIA) futures turned negative in the early hours, pointing to another weak market open.
Investors remain in risk-off mode as coronavirus panic spreads. In a particularly terrifying prediction, Harvard epidemiology professor Marc Lipsitch said the outbreak could infect 40-70% of the global population in the next year.
I think the likely outcome is that it will ultimately not be containable.
If his analysis is correct, yesterday’s stock market plunge is just the beginning. Wall Street research firms are now warning of a recession as severe as 2008.
Dow futures on a knife edge
After yesterday’s 1,000 point plunge, Dow Jones futures contracts made a half-hearted recovery overnight. But even that evaporated, with the meagre gains wiped out by 6 am ET. The stock market now looks set for a weak open.
Coronavirus may not be contained
The World Health Organization yesterday admitted that the global spread of COVID-19 may no longer be containable. With large clusters of cases in Italy, South Korea, Japan, and the Middle East, this is now a global outbreak.
Harvard professor Lipsitch said it would only takes a cluster of 100-200 infections in the U.S. to trigger a wider spread. Although his dire estimate of 40-70% of global infection won’t all be severe:
It’s likely that many will have mild disease, or may be asymptomatic.
Even a conservative reading of his figures would spell disaster for the…