Macro Dragon: +15K Cases In China, Put a Fork in Biden - perhaps even Warren?

Macro 2 minutes to read

Kay Van-Petersen

Global Macro Strategist

Summary:  As the Asia Thu morning start, we got news that have taken Equity Futures from green to red, with S&P futures currently down -0.30% on the news that we have potentially c. +15,000 new cases found in the province of Hubei - due to revised testing methods. This would take the confirmed cases to 60,000, which is on track to get to the 7 figures that we have been extrapolating on, since the 2019-nCoV now formally called Covid-19 kicked off. We also check in on US politics - put a fork in Biden! And see some central bankers comment on the virus as well as China stimulus.


(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)

2020-Feb-13

 

Macro Dragon:+15K New Virus Cases + Put a fork in Biden & perhaps also Warren?

 

US Elections Checks in & Other Thoughts…

  • Bernie took NH, with Buttigieg close on his heels… As has been flagged to KVP (& believe we mentioned that IO & NH are very white states), Buttigieg base seems to be progressive, wealthy white folks, with actually very little traction on millennials despite at 38 him being much younger than the rest of the field. Millennials love ‘The Bern’. Klobuchar likely also took some wind out of Buttigieg sales (lucky for Sanders), yet she came in above Warren.
  • Unless Bernie stumbles any time soon (Unlikely), Warren is likely done – some massive time decay on that vehicle. Buttigieg & Klobuchar are likely going to struggle again the non-white base, as well as the less wealthy… stay tuned.
  • Meanwhile markets don’t really seem to care on any risk of a Sanders nomination – whether that’s because its priced correctly (i.e. he has not chance), its too early in the cycle & is not dominating enough, Trump has it in the bag, etc… too early to tell.

 

Covid-19 Update Thu Asia Mrn 12 Feb & Thoughts…

 

Quick update & thoughts on the Virus since the Yest’s check in:

  • As of this Wed 13 Asia morning, the China figures we are getting are at c. 45,200 confirmed cases, +1120 deaths & +5,150 recovered. So suggesting a considerable slowdown in confirmed cases in China & big uptick in those recovering.   
  • However a breaking news headline suggest that we may need to add up to +15,000 new cases stemming from the province of Hubei (60m people), given new methods used to test & screen for the coronavirus
  • This has sent S&P futures from positive territory to c. -0.40% to -0.50% lower this early morning Asia. If this is true, that would take confirmed cases in China to +60,000. As the Macro Dragon have conservatively stipulated before, given the population & seasonal dynamics of China – we likely get into the 6 figures before the Covid-19 is fully contained. And again 60,000 in a province of 60m (funnily enough the number of Americans infected with the H1N1 swine flu virus that broke out in the US in 2009), is only 0.10%.
  • One last point, a lot of countries are starting to put restrictions on travel to places like Singapore – this again is the paradox of circles of silence (just because the data is not there, does not mean there is no data). What people should be instead thinking is, if Singapore with its incredible experience, resources & organization honed through SARs has found these 50 cases, what is the “REAL” case count in other countries? i.e. Indonesia with 230m, Thailand with 70m, all whom also do a tremendous amount of business & travel with China.
  • Obviously an element of this is political – you have to be seen to be doing something, regardless of whether that action is actually fruitful or futile.
  • BoC’s Poloz is saying to early to really process the effects of the virus. And RBA’s Lowe point out that China has indicated that they will stimulate which should be good for the Australian economy. You have to wonder whether we could see an RBA similar to RBNZ o/n which did not cut rates as per expectations, yet seemed to signal that there would be no cuts in 2020 – sending the kiwi higher against crosses, there could be quite a bit of juice left here over the year (i.e. get to the other side of CH data gaining).

Outside of China the countries with confirmed cases over 10 are:

  • Japan 202 (174 from the cruise ship)
  • Hong Kong 50 (+1)
  • Singapore 50 (+3)
  • Thailand 33 (+1)
  • South Korea 28
  • Taiwan 18
  • Malaysia 18
  • Germany 16
  • Australia 15
  • Vietnam 15
  • United States 13 (+1)
  • France 11
  • Macau 10

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      Have a fantastic, gratitude & abundant filled close to the wk everyone, stay healthy as well as keep your mind open to profitable & abundant opportunities. Life happens for us, not to us.  


      Namaste,

      -KVP

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