The rate of new coronavirus infections in China have slowed, but concerns about mounting human and economic costs battered markets on Thursday.
The current death toll has crossed 2,100, while confirmed cases are now greater than 75,000. Meanwhile, the number of recoveries has been increasing — with nearly a quarter of reported cases, or 16,000, recovered. The U.S. case count remains low, at 29, but a surge of new cases in Japan and South Korea are stoking new fears.
Those developments have cheered the World Health Organization — but the organization cautioned it was far too early to know if the trend was sustainable.
"We are encouraged by this trend but this is no time for complacency," the WHO's director general, Tedros Adhanom Ghebreyesus, told a briefing in Geneva. Most cases remain contained to mainland China, but the director warned “that may not stay the same for very long."
With the virus still shrouded in mystery, major airlines have pulled back from flying into the world’s second largest economy.
On Thursday, the International Air Transport Association (IATA) estimated the outbreak may result in a 13% full-year loss of Asia-Pacific passenger demand — translating into a 2020 revenue loss of close to $30 billion.
“Airlines are making difficult decisions to cut capacity and in some cases routes,” said Alexandre de Juniac, IATA’s Director General and CEO, in a statement.
“Lower fuel costs will help offset some of the lost revenue [but] this will be a very tough year for airlines,” he added.
Markets still ‘fairly complacent’
After setting new records on Wednesday, major stock benchmarks relapsed in Thursday’s trading as investors weighed the coronavirus’s long-term impact. And following the quarantine of the Diamond Princess cruise ship in Japan and restrictions on cruises bound for or returning from Asia, the industry continues to feel the pressure from the outbreak.
Kim Tilley, portfolio manager on the dynamic portfolio solutions team at Lazard Asset Management told Yahoo Finance the markets haven’t been doing a good job of reacting to the virus, known as Covid-19.
“This came at a time where we are 10 years into a bull market, and people are fairly complacent,” Tilley said. She added that the market recovery from the end of January “is not taking the impact to China’s economy quite as seriously as it should.”
Even though the virus’ spread has remained mostly contained to China, the economy is deeply intertwined with the rest of the world. With activity there at a standstill, it’s sending shockwaves across the world, and creating real pain for multinational corporations.
Wells Fargo Securities analyst Christopher Harvey recently said in a note that virus is likely to delay any global growth rebound by 1-2 months.
“Despite progress with the Phase 1 trade deal, we expect to see further supply chain disintermediation from China. The coronavirus is another stark reminder...that diversification and counter-party risks have been under-appreciated for years,” Harvey said.
Travel, luxury, hospitality, retail and restaurant brands are increasingly worried about the impact to their first quarter, and possibly beyond. Companies that rely on China for parts and manufacturing are also feeling the crunch amid widespread quarantines and travel restrictions within and outside the country’s borders.
Around the world
Two elderly Japanese citizens died after leaving the Diamond Princess, which began releasing quarantined passengers this week. Of those nearly 3,700 on board, more than 600 have been confirmed to have the virus, including 14 U.S. residents who were evacuated this week.
Iran on Thursday reported its first five cases and two deaths, marking an expansion in global spread of the virus, which has until now been largely contained to Asia.
Macau’s 41 casinos reopened Thursday despite a lack of visitors. Yet the casinos have seen a steep decline in visitors year-over-year as travel restrictions and quarantines are keeping customers away, and are losing millions daily to keep employees on payroll.
Anjalee Khemlani is a reporter at Yahoo Finance. Follow her on Twitter: @AnjKhem