I wanted to send out a short note regarding the Coronavirus that has spread throughout the Hubei province of China, and how it is causing volatility throughout global financial markets. It is still surprising to me that this type of news can rattle markets, so here is some historical perspective. We remember back to 1997 and the H5N1 bird flu and how the Chinese ended up killing 1.3 million chickens, ducks, & other birds to stop this virus. In 2002-2003 there was the SARS epidemic that went unreported by the Chinese government for months before it alerted the World Health Organization and finally brought the virus under control. In 2014 there were even a couple of cases of Ebola that reached the US from the African outbreak. These are all serious occurrences, though they tend to have a small, short-term impact on the global economy. I do not want to minimize the severity of these outbreaks, but rather try and give some understanding about how these have impacted markets in the past. One of the biggest concern’s coming out of this virus is China’s continued lack of disclosure. They are still not letting the world know when there is the potential for a serious health issue spreading throughout their country.
During the course of a “normal” flu season, an average of 250,000-650,000 people die each year from the flu, yet this goes mostly unreported. Let’s not let this most recent crisis derail us from our long-term plans. In the winter issue of Market Perspectives, I mentioned there will more than likely be volatility around the upcoming primaries & November elections, who would’ve guessed it would start with another bird flu out of China?
Brett Carleton, CFP, ChFC