Futures tied to the Dow Jones Industrial Average declined by 0.6 %, in sharp contrast to yesterday when all three major U.S. indexes closed at record-highs.
China claimed the Covid-19 coronavirus was under control, and the financial markets were showing a curious detachment and looking away, focusing on an avalanche of results from very large companies
You may have seen recently on social networks corner calculations demonstrating by a rule of three that the number of coronavirus infections in China was necessarily higher than what was announced. All you had to do was cross-reference the number of deaths recorded in the country and the number of deaths recorded outside China against the number of infections recorded in both areas. Reality proved the apprentice mathematicians right and cost the head of the communist party in Hubei province his head. Under cover of a change in counting methods, Beijing has increased its list of infected people to nearly 60,000 and its death toll to 1,355. That's 14,840 and 242 more respectively than the day before, the highest figures since the beginning of the epidemic.
Obviously, this worsening of the situation is a cause for concern, even though 99.9% of the fatal cases were recorded within the country's borders and the two deaths outside the country concern Chinese nationals. The local economy is likely to be paralyzed for some time to come, with negative consequences on the supply chain of several industries and probably on the results of many companies. Hundreds of "coronavirus-free" targets are expected to emerge by the time the first-quarter 2020 accounts are published.
Elsewhere, there was disappointing industrial production in the euro zone: December came in at -2.1%, the largest drop in 4 years. This sharp slowdown underscores fears about the economy. Several companies have had to close production plants in China, which will inevitably disrupt the supply chain and profits.
Today on the agenda, we have final German inflation figures and the latest EU economic forecast. In the United States, inflation and weekly Unemployment Claims will be the focus of attention.