One of the worst places for a pandemic to begin is from within a totalitarian state as local party minions tend to be too scared to pass bad news up the chain of command, and obediently wait on orders from leaders residing many hundreds of miles away, by which time it's too late where virus's are concerned, and so it has been with the Corona virus outbreak in China. Don't be fooled by Chinese state propaganda of panic building of hospitals, chinese communist party bureaucracy ensures that it is already too late! The Corona virus has spread throughout China!

I am sure you have all seen news footage of deserted Wuhan streets. Though none of the news reporters appear to have put 2 and 2 together and worked out the reason why the streets are empty is because most of the people living there have already FLED the city, taking their Corona virus infections with them! TOO LATE, OUT OF CONTROL!

How bad could things get? Well 2,700 infected and 96 deaths that we know of in just over a month (actual number may be closer to 50000 infected). Now compare this to the 8 month SARS outbreak between November 2002 and July 2003 that resulted in 8,098 infections and 774 deaths that had a 9.6% fatality rate.

Whilst for the Corona virus we don't know how many deaths there have actually been or how many are really infected as the actual number is likely far higher than Chinese Government propaganda.

The official statistics (96/2700) suggest a fatality rate of 3.5%, about 1/3rd of the SARS virus. So likely under reporting of the actual number of deaths.

However, the Corona virus is far more infectious than SARs, how bad?, a "HOLY MOTHER OF GOD" BAD!

Given the exponential rate of spread of the virus, then by the end of February 2020 as many as 1 million people could be infected globally, that at a 3.5% fatality rate would result in 35,000 deaths. Though the true fatality rate will likely be significantly higher, and likely the virus has already spread to most nations (including Britain) given that approx 1 million Chinese students have traveled back to foreign Universities after the New year holidays.

A lesson from nature, don't EAT CATS and DOGS! Never mind wild BATS! Barmy Chinese diet asking for trouble!

Market implications?

If the above starts to pan out over the next few weeks then the market will increasingly discount future economic impact of a Global Pandemic i.e. flight to safety and lower stock prices.

In part the Dow and other stock market indices have already started to discount Pandemic consequences, though the trend is in line with my expectations for 2020 (Stock Market Trend Forecast Outlook for 2020).

So a potential AI mega-trend stocks buying opportunity. Though stock sectors likely hardest hit will be travel, tourism and retail.

And of course the Chinese stock market is paying the biggest price for the consequences of a totalitarian state's failure to act in time.

My next analysis will conclude in a multi-month stock market trend forecast, whilst a reminder that my overall forecast for the stock market into the end of 2020 (Stock Market Trend Forecast Outlook for 2020).

So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

Also immediate access to my just completed analysis that lists potential buying levels for the Top 15 AI Mega-trend stocks. Where the main thing is for investors to HAVE EXPOSURE to the AI sector! Because without any exposure your not riding the AI train and so unless you are prepared to immerse yourself in AI, i.e. trundle along to the many AI platforms out there such as by Google. Microsoft or Elon Musk's OpenAI then your only real way to capitalise on the AI mega-trend is buy OWNING AI stocks.

This graph further illustrates the magnitude of the change currently under way, where just 2 primary AI stocks, Apple and Microsoft are now worth more than the entire German stock market!

AI Stocks 2019 Review and Buying Levels Q1 2020

Also recently completed -

Scheduled Analysis Includes:

Silver Trend Analysis
Stock Market Multi Month Trend Forecast 2020
UK Housing market series
Machine Intelligence Investing stocks sub sector analysis
Euro Dollar Futures
EUR/RUB
US House Prices update

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By Nadeem Walayat

http://www.marketoracle.co.uk

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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