Markets are putting pressure on the Federal Reserve for at least one rate cut

Federal Reserve officials this week affirmed their commitment to staying put on interest rates for the time being, but markets have other ideas.
The fed funds futures market, where traders go to bet on the central bank’s policy direction, is pricing in about a 58% chance of a rate cut by June, according to the CME’s FedWatch tool. Traders are even making room for two cuts, assigning a nearly 60% chance of another move lower in December.

Expectations for an easing have accelerated as the coronavirus has begun to spread globally and threatens to dent China’s already decelerating growth. Stocks have surrendered their January gains and bonds are again flashing a recession signal through an inverted yield curve.
Markets, then, might be bracing against the chance of a contagion both medically and economically.
“The Fed won’t divorce itself from the human aspect of this. But it will be about growth and whether or not this affects growth,” said Quincy Krosby, chief market strategist at Prudential Financial. “China is the second-largest economy in the world. If demand in China slows, it’s going to affect some of the larger trading partners. It won’t just be the U.S. That could stymie attempts of monetary and fiscal stimulus to bolster global growth.”

‘Wait and see’

Central bankers tend to look through events like natural disasters and the spread of infectious disease as one-off events unlikely to figure into the longer-term picture and thus move interest rates.
But Fed Chairman Jerome Powell did acknowledge the coronoavirus this week, and it’s like to come up once officials resume making position speeches now that the January meeting is past.

“The situation is really in its early stages and it’s very uncertain about how far it will spread and what the macroeconomic effects will be in China and its immediate trading partners and neighbors and around the world,” Powell said at his post-meeting news conference Wednesday. “So in light of that uncertainty, I’m not going to speculate about it at this point. I would just tell you that, of course, we are very carefully monitoring the situation.”
He added that future policy decisions are dependent on “the potential ramifications for the U.S. economy and for the achievement of our dual mandate” of full employment and price stability.
The Fed already is in an accommodative posture coming off a 2019 where it cuts its benchmark borrowing rate three times by a total of 75 basis points. A statement the policymakers released upped the central bank’s commitment to boosting the inflation rate to 2%, which it considers healthy for a growing economy.
However, some officials have expressed unease with having rates so close to zero and the limited room that would provide in an economic downturn.
So a cut from here likely wouldn’t come unless the coronavirus presented a longer-term threat to global and U.S. growth.
“If you’re sitting at the Fed, you’re obviously worried about these global risks. But you kind of just sit and wait,” said Jospeh LaVorgana, chief Americas economist at Natixis. “I’d be more comfortable with them keeping the accommodation going through the balance sheet” expansion rather than rate cuts.
Markets, though, are clearly nervous.
Major averages Friday suffered through their worst day since October as the Dow Jones Industrial Average had shed more than 500 points heading into the last hour of trading. The Fed doesn’t directly respond to market tumult, but is no doubt watching what happens.
“What this coronavirus has done now is allow the market to be that much more worried about an inflection in the economy,” LaVorgna said. “The smart move is the Fed should continue to expand the balance sheet and continue to talk dovish, and then take a wait and see attitude.”
https://www.cnbc.com/2020/01/31/markets-are-putting-pressure-on-the-federal-reserve-for-at-least-one-rate-cut.html

Coronavirus: How worried should I be about the shortage of face masks?

The World Health Organisation (WHO) has declared the coronavirus outbreak a public health emergency of international concern.

There have been nearly 10,000 cases of the so-called 2019-nCoV in China, 23 countries affected and more than 213 deaths globally.
China, Germany, the US and several other countries confirmed the virus can spread person to person, even from people without any symptoms.
Now there are reports of face mask shortages around the world, including Australia, the US and in many cities of China.
How concerned should we be about these shortages? Or can we just wrap a scarf or piece of cloth around our face to protect against infection?
How important are face masks?
For a disease with no drug or vaccine yet, non-pharmaceutical measures are the mainstay of control. This includes personal protective equipment, such as face masks.
But the type of face masks we typically see (surgical masks) do not provide a seal around the face or filtration of airborne particles, like those that may carry coronavirus.
They do however provide a limited physical barrier against you transferring the virus from your hand to the face, or from large droplets and splashes of fluid.
You also need to put on and remove your mask properly, as this advice from the World Health Organisation shows.
Disposable respirators reduce the risk of respiratory infections. They are designed to fit around the face and to filter 95% of airborne particles. However, these should be reserved for health workers, who need them most.
Do we really need these masks anyway?
In the disease epicenter, Wuhan, or on an evacuation flight out of Wuhan, face masks are a sensible precaution. They are also needed in other Chinese cities that are affected by the outbreak and where transmission is ongoing.
However, in countries where transmission is not widespread and there are only a handful of cases being treated in hospital isolation rooms, masks serve no purpose in the community.
For example, there is no need for the general public to use face masks in Australia, US and other counties where a few imported cases are reported, and the risk of catching the virus is low.
Panic buying will result in a lack of supplies when we need them most, for instance, if the number of cases escalates dramatically. During the H1N1 influenza pandemic in 2009, the WHO did not recommend the general public use face masks.
The case is different for health workers, who face greater risks. It is essential we provide health workers with the best protection, because if they get sick or die, we lose our ability to fight the epidemic. During the SARS epidemic, 21% of all cases globally were health workers.
How concerned should we be about the shortage of face masks?
This is a concern, especially if people hoard or stockpile face masks when there is no need. We saw a shortage of masks early during the 2009 influenza pandemic. The surge in demand during such events also results in higher prices.
Countries have started releasing stockpiles of masks and other personal protective equipment to the health system. For example, the Australian government this week released one million masks for general practices and pharmacists from the national medical stockpile.
There is also an existing shortage of masks in some areas of Australia due to the bushfire response and face masks from the national stockpile have mainly been released in those areas.

What happens if the situation gets worse?
The number of cases is expected to increase and a large quantity of face masks may be needed.
If the current situation becomes a pandemic (an epidemic that goes global), we could be facing a much greater demand for personal protective equipment in the health sector alone.
In a modeled serious epidemic in Sydney of smallpox, if health workers use two disposable respirators a day for 6 months, over 30 million respirators will be needed for 100,000 clinical health workers.
China is the largest producer of face masks globally and it has already stepped up production to meet the high demand.
If large outbreaks happen in other countries, China may not be able to meet the demand of face masks, respirators and other medical supplies.
Not all face masks are up to the job
Another problem is the sale of low-quality face masks due to a shortage of products on the market, as has been reported in China and Hong Kong.
Face masks are not regulated, may not filter the air, and also typically allow large amounts of air in through the sides. With a shortage of masks, low-quality masks could be exported to other countries.
If I can’t get hold of a mask, can I wrap a scarf around my face?
Wrapping cloth around your face probably will not protect you. That’s because a scarf or a hanky does not provide a tight fit around the face, isn’t designed to filter out air and may be contaminated.
However, during the Ebola epidemic, a woman nursed her entire family through the illness using home-made protective equipment and did not get infected.
In Asia, cloth masks are popular because they are cheap and re-usable. But they don’t protect you. Cloth masks may even increase your risk of infection, especially if you don’t wash them regularly. They may absorb moisture and provide a breeding ground for bugs.
So, ideally, people shouldn’t be using them. However, people may resort to cloth if there is no other choice.
In a nutshell
While news of mask shortages might sound scary, if you are in a country with few isolated cases, you don’t need one anyway as the risk of infection is very low for the general public.
Panic buying or stockpiling also means there won’t be enough to go round should the situation worsen.
Even if you do use a face mask, they may protect against large droplets (ones you can feel on your skin when someone sneezes) and self-contamination from your hands, but not against smaller airborne particles.
Don’t forget, hand-washing is also very effective in preventing infection.

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https://medicalxpress.com/news/2020-01-coronavirus-shortage-masks.html

75,000 in Wuhan infected with coronavirus, study estimates

More than 75,000 people—ten times the official tally of confirmed cases—have been infected with the coronavirus in Wuhan, ground zero of a global health emergency, according to research published Friday.

“We estimate that 75,815 individuals have been infected in Wuhan as of January 25, 2020,” a team led by Gabriel Leung from the University of Hong Kong reported in The Lancet.
As of January 31, the Chinese government said the number of confirmed cases had risen above 9,700 for all of China, including 213 deaths.
For Hubei Province—including Wuhan, a city in central China of 11 million—the official figure was nearly 6,000 confirmed cases and just over 200 deaths.
The World Health Organization on Thursday declared the outbreak a global health emergency, but said it was not recommending any international trade or travel restrictions.
“The apparent discrepancy between our modelled estimates of 2019-nCoV infections and the actual number of confirmed cases in Wuhan could be due to several factors,” Leung said in a statement.
A time lag between infection and symptom onset, delays in infected persons getting medical treatment, and the time needed to confirm cases with lab tests “could all affect overall recording and reporting,” he said.
The study found that each person infected with the virus, which emerged in December, could have infected two to three individuals on average, and that the epidemic had doubled in size every 6.4 days.
If the virus spreads as quickly on a national scale, “it is possible that epidemics could be already growing in multiple major Chinese cities, with a time lag of one to two weeks behind Wuhan,” said co-author Joseph Wu, a professor at the University of Hong Kong.
“Large cities overseas with close transport links to China could potentially also become outbreak epicentres.”
If the new estimate of cases is accurate, it would mean that the mortality rate of the 2019-nCoV virus is significantly lower than preliminary figures suggested, with well under one percent of cases proving deadly.
But a low mortality rate can still result in a large number of deaths if the virus spread widely.
The seasonal flu, for example, kills 290,000 to 650,000 people per year, according to the World Health Organization (WHO).
In the United States, the mortality rate among people infected with influenza is 0.13 percent, the Centers for Disease Control has calculated.
2019-nCoV is part of the coronavirus family, which was the source of two previous deadly epidemics.
The 2002/03 SARS outbreak (Severe Acute Respiratory Syndrome) started in Guangdong Province and killed 774 people out of a total 8,096 infected. The 2012 MERS outbreak (Middle East respiratory syndrome) killed 858 people out of the 2,494 infected.
The respective mortality rates for SARS and MERS patients was 9.5 and 34.5 percent, far higher than for the new coronavirus.

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China virus death toll jumps to 41, cases soar to nearly 1,300

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More information: The Lancet DOI: 10.1016/S0140-6736(20)30260-9: https://www.thelancet.com/pb-assets/Lancet/pdfs/S0140673620302609.pdf

https://medicalxpress.com/news/2020-01-wuhan-infected-coronavirus.html

Can the coronavirus be contained? Unknowns complicate response

China has ordered an unprecedented quarantine of more than 50 million people. It has closed schools and shut down live animal markets. Airports across the globe are screening passengers coming from the world’s most populous country.

But three weeks after the new coronavirus emerged as a health crisis, experts can’t yet say whether these efforts will succeed at containing an infection that now threatens at least 15 countries.

Some early signs are discouraging: Six countries, including China, have confirmed human-to-human transmission of the infection. Those include four cases in Germany connected to a single person — a worrisome sign for containment of the disease. Cases in China continue to multiply, and five million residents of Wuhan, where the virus originated, have left the city, some of them surely carrying the disease.

But so far, the mortality rate is less than the rate of other severe respiratory coronaviruses. In China, where 5,974 people are infected, 132 have died through Tuesday. That is a high rate, but far less than the fatality rate of SARS and MERS. And countries like the United States that quickly began screening travelers, isolating sick people and tracing their contacts have just a handful of cases. There have been no fatalities outside China.

Public health officials said Tuesday that they are grappling with a long list of unknowns that will determine how successful they are in limiting the toll of the widening outbreak. Those questions include how lethal the virus may be, how contagious it is, whether it is transmitted by people who are infected but show no symptoms, and whether it can be largely contained in its country of origin.

“It is very striking how quickly the numbers are going up,” said Trish Perl, chief of infectious diseases and geographic medicine at UT Southwestern Medical Center, who has fought other respiratory virus outbreaks, including SARS and MERS.

“As the numbers are going up, do I think I’m concerned about the rapidity of it? Yes,” Perl said. “Do I think it may be difficult to control? Yes. But in the context of a lot of unknowns.”

Experts are not sure whether the rise in new cases means the virus is now widely circulating in China, or whether the Chinese are doing a better job of surveillance and testing, or both.

U.S. health officials held a news conference Tuesday to reassure a wary public that, for now, virtually no one here is in imminent danger.

“Americans should know that this is a potentially very serious public health threat, but, at this point, Americans should not worry for their own safety,” said Secretary of Health and Human Services Alex Azar.

The new virus is not nearly as infectious as the measles virus, which can live as long as two hours in the air after an infected person coughs or sneezes, and it is not comparable to the threat posed by the seasonal flu, which has killed at least 8,200 people in the United States so far this season.

But Azar also acknowledged, “We don’t yet know everything we need to know about this virus.”

China agreed Tuesday to allow a World Health Organization team of experts into the country to study the coronavirus, officials of the U.N. agency said after a meeting between the organization’s director general and Chinese leader Xi Jinping.

“The two sides agreed that WHO will send international experts to visit China as soon as possible to work with Chinese counterparts on increasing understanding of the outbreak to guide global response efforts,” the statement said.

It was unclear whether the team would include experts from the U.S. Centers for Disease Control and Prevention.

But several nations continued to pursue or consider evacuating their citizens from Wuhan, including France, South Korea, Morocco, Britain, Germany, Canada, the Netherlands and Russia.

In the Philippines, immigration authorities temporarily suspended the issuance of visas for Chinese nationals upon arrival. Immigration commissioner Jaime Morente said the move was designed “to slow down the influx of group tours” and prevent the spread of the virus.

Hong Kong Chief Executive Carrie Lam announced dramatic measures to stem the flow of mainland Chinese into the territory, including the closure of railways, ferries and cross-border tour buses. Flights to mainland China will be slashed by half, and the Hong Kong government will stop issuing individual travel visas to mainland Chinese, starting Thursday.

Yet for all the action taken, even the near future remains uncertain.

“There is a real possibility that this virus will not be able to be contained,” said former CDC director Tom Frieden, who oversaw the responses to the Ebola and Zika outbreaks.

Researchers are struggling to accurately model the outbreak and predict how it might unfold, in part because the data released by Chinese authorities is incomplete. China has shared information showing when cases were reported, but not when people became ill.

Researchers also want to know more about the incubation period, currently estimated at two to 14 days, and how severe most cases are.

The virus’s fatality rate is just over two percent, if figures posted by the Chinese government are accurate. That is considerably lower than death rates from the respiratory coronaviruses that caused SARS, which killed nearly 10 percent of people infected, and MERS, which killed about 35 percent.

Some experts are encouraged that no case outside China seems to be severe. and that no fatalities have been recorded outside China so far.

Others cautioned that the current death rate may mean little because the most severe cases in an epidemic like this one often emerge early, when sick people present themselves to health care providers, then become fewer as public health measures are instituted and medical care is strengthened.

Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, noted in an interview that the virus may have been spreading unnoticed for weeks in Wuhan before it emerged into public view.

If many people had mild symptoms, it would have been easy to miss them, and that made it harder to put control measures in place, said Jennifer Nuzzo, an epidemiologist and senior scholar at the Johns Hopkins Center for Health Security.

Experts also are unsure whether asymptomatic patients can transmit the virus. China’s health minister Ma Xiaowei alarmed officials around the world this weekend when he said his government had evidence that this type of spread was occurring.

But U.S. officials have challenged that conclusion, saying they have not seen data that prove it and want the Chinese to show them. And asymptomatic patients never drive more than a small percentage of infections in epidemics such as this one, Fauci said.

“Even if there some asymptomatic transmission, in all the history of respiratory-borne viruses of any type, asymptomatic transmission has never been the driver of outbreaks,” he said. “The driver of outbreaks is always a symptomatic person.”

Frieden and others emphasized that even if officials cannot stop transmission, they can still reduce the number of people who get infected, as well as those who get very sick and die. A critical measure, for example, is beefing up readiness by training health-care workers in hospitals to prevent the spread of illness.

At the moment, U.S. officials are isolating coronavirus patients in the hospital. But that may not be practical if there are many more cases. During SARS, highly infectious patients known as “super spreaders” were responsible for the virus’s rapid spread in health-care facilities.

It makes more sense to isolate someone with a mild coronavirus illness at home, said Nuzzo, the Hopkins expert. “If somebody only has a fever and runny nose, is there a need to freak out?” she said.

https://www.washingtonpost.com/health/coronavirus-spread-containment-strategy/2020/01/28/84c25030-4200-11ea-aa6a-083d01b3ed18_story.html

What are the obstacles to Bayer settling Roundup lawsuits?

Bayer AG is in mediation to potentially settle thousands of U.S. lawsuits claiming that the company’s Roundup weed killer causes cancer, but some legal experts said the cases raises novel questions that may prevent an easy settlement.

More than 42,700 plaintiffs claim Roundup causes a type of cancer called non-Hodgkin’s lymphoma.
Bayer to date has lost three U.S. jury trials in the Roundup litigation. The company is appealing or has vowed to appeal the decisions, saying Roundup and its active ingredient glyphosate are not carcinogenic and safe for human use.
Legal experts outlined several obstacles the parties may face on the path towards settlement.
WHY IS THE ROUNDUP LITIGATION DIFFERENT FROM OTHER PRODUCT CASES?
Settlements involving drugs, medical devices or consumer goods often result in the addition of a warning label, a recall or the outright discontinuance of a product. Those steps generally close the door to future lawsuits, making settlement costs and risks predictable.
Bayer has never publicly considered pulling Roundup off the market. The company in June announced a $5.6 billion investment to research and develop a glyphosate alternative.
Bayer unit Monsanto began selling Roundup in 1974 and while the formulation is no longer patent-protected, Roundup remains widely available today. Bayer has repeatedly said Roundup is safe and important to farmers who use the herbicide in combination with the company’s genetically modified seeds
Non-Hodgkin’s lymphoma on average can take up to 10 years to emerge, increasing the likelihood of claims being filed after the litigation has settled. Product liability settlements generally include a cut-off date for future claimants and need to be properly funded for a court to approve the agreement.
As long as the product continues to be sold without changes to the label, plaintiffs may continue to file lawsuits, said Elizabeth Burch, a law professor at the University of Georgia.
COULD BAYER ADD A CANCER WARNING?
Plaintiffs lawyers, who claim the company manipulated the science, told Reuters they would insist on a cancer warning label as part of any Roundup settlement.
Such a warning has been rejected by the U.S. Environmental Protection Agency, which regulates pesticides and repeatedly has found glyphosate to be safe.
The agency said it has finished a regulatory review that found glyphosate is not a carcinogen.
In a filing to a federal appeals court, which hears one of the appeals to a jury verdict, the EPA and the U.S. Justice Department backed Bayer and said it was unlawful for manufacturers to make label claims that differ from EPA approval.
David Noll, a professor at Rutgers Law School, said adding a cancer warning over a regulator’s explicit opposition presented unchartered legal territory.
HOW COULD BAYER SETTLE THE ROUNDUP LITIGATION?
To settle product liability litigation, companies generally set up a fund and the parties define criteria that current and future claimants must fulfill to receive compensation.
In the Roundup litigation, claimants could be divided into different groups depending on the frequency of their Roundup use and disease severity and length.
But Adam Zimmerman, a law professor at Loyola Law School, said defining those groups is complicated by the lack of a signature disease associated with Roundup, making it difficult to predict Bayer’s liability.
For example, in asbestos litigation, mesothelioma, a rare tissue cancer, was recognized as a signature disease caused by exposure to asbestos fibers.
Doctors recognize several risk factors leading to non-Hodgkin’s lymphoma, but the disease is largely considered to have no known cause. Around 74,000 people in the United States are expected to be diagnosed with the disease in 2019, according to the American Cancer Society.
Settling claims might not preclude future lawsuits if the fund runs out of money. In the Agent Orange litigation, Vietnam War veterans were allowed to sue chemical companies decades after a settlement was reached because the compensation fund was depleted by the time they developed their diseases.

https://www.marketscreener.com/BAYER-AG-436063/news/Bayer-What-are-the-obstacles-to-Bayer-settling-Roundup-lawsuits-29921670/

China to exempt taxes for imports of products related to virus control

China will implement tax exemptions for imports of products related to curbing the coronavirus outbreak, the finance ministry said on Saturday.

Materials directly used for epidemic control will be exempt from import tariffs from Jan. 1 to March 31, the ministry said in a statement on its website.
Imports of donations including ambulances and disinfectant products will also be exempt from tariffs, value-added tax and consumption tax, it said.

https://www.marketscreener.com/news/China-to-exempt-taxes-for-imports-of-products-related-to-virus-control–29928618/

As coronavirus misinformation spreads on social media, Facebook removes posts

Facebook Inc said it will take down misinformation about China’s fast-spreading coronavirus, in a rare departure from its usual approach to dubious health content that is presenting a fresh challenge for social media companies.

The coronavirus outbreak has stoked a wave of anti-China sentiment around the globe. Hoaxes have spread widely online, promoted by conspiracy theorists and exacerbated by a dearth of information from the cordoned-off zone around China’s central city of Wuhan, where the outbreak began.
Nearly 12,000 people have been infected in China, according to local health authorities, and more than 130 cases reported in at least 25 other countries and regions.
Facebook said in a blog post that it would remove content about the virus “with false claims or conspiracy theories that have been flagged by leading global health organizations and local health authorities,” saying such content would violate its ban on misinformation leading to “physical harm.”
The move is unusually aggressive for the world’s biggest social network, which generally limits the distribution of content containing health misinformation to its 2.9 billion monthly users through restrictions on search results and advertising, but allows the original posts to stay up.
It also puts it at odds with other major U.S.-based social networks. Alphabet Inc YouTube, which has 2 billion monthly users and Twitter and Reddit, which have hundreds of millions of users, confirmed they do not consider inaccurate information about health to be a violation of their policies.
Those companies, like Facebook in other cases, rely on techniques such as elevating medical information from authoritative public health sources and warning users about content that has been debunked.
TikTok, owned by China’s Bytedance, and Pinterest Inc do ban health misinformation and are actively removing false coronavirus content, they told Reuters.
FAKE NEWS, PHYSICAL HARM
Fact-checking initiative PolitiFact said misinformation about the virus online included hoaxes about its source, its spread, and how to treat it, as well as false conspiracies about its connection to biological warfare and the Chinese government.
Rumors about the coronavirus have also spread widely on Chinese social networks, which are usually quick to remove sensitive content but have in recent days allowed an unusual level of public criticism over the government’s handling of the crisis.
Information in China is tightly controlled, and Chinese laws dictate that rumor-mongers can face years in prison. In the early days of the outbreak, Chinese state media reported that police in Wuhan had detained eight people for spreading rumors about a “local outbreak of unidentifiable pneumonia.”
Suspicion also lingers over accusations that Beijing initially covered up the 2003 Severe Acute Respiratory Syndrome (SARS) outbreak.
A spokeswoman for Tencent Holdings Inc’s Chinese messaging app WeChat, which has 1.15 billion monthly users, told Reuters the company was removing posts containing coronavirus-related misinformation.
The U.S. tech industry’s mostly hands-off approach has angered critics who say social media companies have failed to curb the spread of medical inaccuracies that pose major global health threats.
In particular, misinformation about vaccination has proliferated on social media in many countries in recent years, including during major vaccination campaigns to prevent polio in Pakistan and to immunize against yellow fever in South America.
Facebook, under fierce scrutiny worldwide in recent years over its privacy and content practices, has previously removed vaccine misinformation in Samoa, where a measles outbreak killed dozens late last year.
The spread of illness there was so severe that the company classified anti-vaccination content a risk of physical harm, a spokeswoman told Reuters, calling the move an “extreme action.”
The coronavirus and Samoa decisions indicate Facebook is expanding its definition of “physical harm” to include misinformation contributing to the rapid spread of illness.
The company did not say whether it had acted in a similar way in other cases.
It removed misinformation about polio vaccines in Pakistan, but the imminent harm in that case involved risks of violence against the health workers carrying out the immunization campaigns, the spokeswoman said.

https://www.marketscreener.com/TENCENT-HOLDINGS-LIMITED-3045861/news/As-coronavirus-misinformation-spreads-on-social-media-Facebook-removes-posts-29923909/?countview=0