Is Coronavirus a Chinese Bio-Weapon?
Donald L. Luskin
Monday, February 3, 2020
Definitely. Possibly. Uh, you can’t rule it out. Well, not really. OK, it’s a US bio-weapon.
US Macro
Asia Macro
US Stocks
US Bonds
Federal Reserve
Considering the risks, asset markets have barely corrected in the face of the coronavirus outbreak. Yet already we’re hearing the kind of crazy-talk that marks bottoms. Conspiracy theories are swirling that 2019-nCoV is a Chinese bioweapon escaped from a Wuhan level-4 lab. Indian scientists claim to have identified components of HIV in it, which are “unlikely to be fortuitous,” but their paper has been withdrawn under criticism. Xi has put his reputation at stake on this, and is in “whatever it takes” mode in containment and financial support. OPEC and Russia are talking about supporting oil prices. US earnings upgrades are surging at rates not seen in a year and a half. The Fed has inverted the yield curve with its rate hike last week, but Powell is telling legislators he is ready to act. We are on the look-out for tape-bombs when companies start warning about earnings because of the virus, especially if they come when the statistics show the worst has already passed.