Authored by Michael Every via Rabobank,

So it was right not to “buy the dip”. 

Virus cases continue to escalate almost everywhere that already had them, despite government lockdowns, and nobody and nowhere is proving immune. Iran’s Vice-President is infected and their ambassador to the Vatican has just died from it; now the Pope is feeling ill, if not necessarily with COVID-19.

Nigeria has its first case, which could mean havoc for that economy with its lack of healthcare facilities. New Zealand has an Iran-linked case. Lithuania has a case. The Netherlands has its first case. Germany and Spain are seeing more and more cases, and Italy is up to 528 with 17 deaths. Even in South Korea, being held up as a benchmark of how a developed economy with full data transparency and rapid, wide virus testing can respond, the number of new cases continues to rise. It’s also worth noting that while China is seeing fewer new cases—apparently--it is also seeing dozens of deaths each day (now 2,788 with 44 just added). That makes COVID-19 look more and more deadly as the epidemic data move around. The WHO helpfully stress that this “could get out of control” but still isn’t a global pandemic…so closing down global travel is not a solution.

In hindsight, and not being the head of a World Health Organisation, might I ask if perhaps having done so a month ago might have done the trick?

But too late.

We now also see panic and confusion in parts of the US: dozens have now tested positive in California, with reports of potential virus patients being treated by staff without protective suits, while in Hawaii there has been panic buying reported. The new “Virus Czar” Mike Pence has also just appointed some very old faces, Treasury Secretary Mnuchin and Economic Advisor Larry “airtight” Kudlow, to help him out: because of their vast professional experience in epidemiology and virus science, obviously. As we see ever-increasing virus circles, does that ever-decreasing pool of White House talent inspire confidence? Not so much, despite President Trump’s confident assertion that he is doing an “incredible” job.

After all, even his

… has accelerated only this time without even a casual attempt to buy the dip, with the S&P plunge accelerating, and briefly dipping below 2,800. As shown in the chart below, the S&P is now down over 13% from its Friday high, and the selloff shows no signs of abating as both man and machine are now openly dumping risk as the coronavirus epidemic gets worse by the day.

Futures on American gauges were all down at least 0.8%, a more modest drop than elsewhere in the world, but still suggesting U.S. stocks will retreat for a seventh straight session, cementing the worst week since the global financial crisis. Wall Street shares plunged 4.4% on Thursday alone, the largest fall since the August 2011 US downgrade. Futures pointed to a modest 1% drop later, but the S&P 500 has lost 12% since hitting a record high just nine days ago, putting it in so-called correction territory

"Investors are trying to price in the worst-case scenario and the biggest risk is what happens now in the United States and other major countries outside of Asia," said SEI Investments Head of Asian Equities John Lau. "These are highly uncertainty times, no one really knows the answer and the markets are really panicking."

And as the accelerating global coronavirus panic sent world stock markets skidding again on Friday into an angry sea of red…

…compounding their worst crash since the 2008 global financial crisis and pushing the week’s wipeout in value terms to $5 trillion. MSCI’s all-country world index, which tracks almost 50 countries, was down more than 1% ahead of U.S. trading and almost 10% for the week – the worst since October 2008.

… the VIX exploded, with equity

OPEC slashed its oil demand forecast earlier this month, and Goldman Sachs doubled down on its bearish oil take and has cut its oil price target by $10 to $53 for the year, as a result of a "demand shock" that has collapsed Chinese oil demand by at least 20%, or as much as 4 million barrels per day.

The plunge in energy demand in China, which by the way, is the world's largest oil importer, has stranded oil cargoes off the coast of the country and led to an oil tanker parking lot in Asia Pacific waters. 

The gears of the global economy have jammed, as demand and supply shocks from China risks triggering the next economic crisis. 

Paralysis is quickly developing across the global economy, as sea and land ports in China have reduced activity. When supply chains are severed, economies on both sides of the world are damaged. 

International Chamber of Shipping (ICS) Secretary-General Guy Platten told Reuters on Wednesday that revenue shocks have already hurt shippers this year. 

Platten said tanker rates had plunged upwards of 80% since the virus outbreak began last month. 

He said the virus is "hugely disruptive" for the shipping industry as demand for raw materials from emerging and developed economies has dramatically slowed. 

"On the finished goods side of it you've got empty containers for example in China and you've got a shortage of containers in the (United) States because the manufactured goods are not getting out of China and being transported around the world. It's affecting all the supply chain throughout the shipping industry," he said.

Platten said shipping rates have crashed in various vessel classes. "We know that container lines are doing empty sailings. It would be hundreds of hundreds of millions of dollars (that) would be in jeopardy now." 

"All we know

This is the biggest jump in incomes since Dec 2018 and spending growth was the weakest since Feb 2019…

Source: Bloomberg

On a year-over-year basis, December saw a big surge (due to Dec 2018's stocks-market-plunge-driven collapse in spending) and January saw that give back some as incomes grew at 4.0% YoY…

Source: Bloomberg

Under the hood, the picture was mixed with private workers wage growth slowing compared to rising government worker wage growth…

Finally, we note that The Fed's favored inflation indicator – PCE Core Deflator – rose to +1.63% YoY (though less than expected)…

Source: Bloomberg

Of course, all of this data is 'old' and hit before the impacts of Covid-19 really started.

• Nigeria confirms first case
• South Korea reports 256 new cases
• WHO says outbreak in Iran likely worse than official numbers suggest; outbreak could go in "any direction"
• Cali monitoring 8400, 28 cases in the state
• China reports 327 new cases and 44 new deaths on Thursday
• Dozens of hospital staffers who treated US coronavirus patient with 'unknown' origin being 'monitored'
• Facebook cancels annual 'F8' developers' conference
• 700 in New York asked to 'self-isolate'
• Iran confirms 26 deaths, vice president for women and family affairs infected
• The Netherlands has confirmed its first case
• Northern Ireland confirms first case
• Norway confirms three new cases
• Germany confirms 14 new cases
• Lagarde: Not yet time for ECB to intervene to fight economic backlash of outbreak
• HHS says risk to public remains "low"
• Italy reports 3 more deaths, bringing total to 17; total cases hit 650
• Pence, Azar appoint Mnuchin, Kudlow & Surgeon General Adams to Coronavirus Task Force
• Starbucks says it has reopened 85% of Chinese restaurants
• Azar: Sonoma case might be 'community transmission'
• Salvini meets with Italian president amid national unity government speculation
• South Korean new cases surpass China's new cases as SK confirms 505 new cases
• China, Japan close school nationwide
• CDC fears 'community outbreak' in Sonoma County after discovering first US case of "unknown origin"
• CDC says patient from Solano county
• Saudi Arabia suspends pilgrimages to Holy Sites
• Hawaiian Airlines suspends service to South Korea
• Brazil's neighbors take steps to keep virus out

* * *

Update (2008): South Korea reported 256 newly confirmed cases in its first update of the day on Friday (this week, health officials have been updating the count every 12 hours or so). The new batch brings the small East Asian country's total to 2,022, and also puts South Korea on track to confirm more than 1,000 new cases in 48 hours.

There has been a flurry

According to the automaker, "colleagues who came in close contact with the infected employee" have been placed in "self-quarantine" and are being "tested for possible infection."

It's just the latest indication of the massive economic toll that the coronavirus is having on the already-struggling South Korean economy, which was already mired in a trade dispute with Japan before the virus arrived.

Hyundai is "thoroughly" disinfecting the facility and has given no indication of when production might resume.

The plant is known for producing the company's immensely popular SUV models, including the GV80, Palisade, Santa Fe, and Tucson, turning out roughly 1,000 cars per day. The company has five factories in the area, with an annual production capacity of 1.4 million vehicles, or about 30% of its global production.

Despite a virus-infected employee (and who knows how many others…), Hyundai has also been struggling with severed supply chains involving suppliers from China, which is why the company chose to idle some Ulsan plants earlier this month.

Samsung announced last weekend that its smartphone factory in Gumi-si, South Korea, closed because of a virus outbreak at the factory.

Last week, chipmaker SK Hynix, a key Apple supplier, reported a virus infection case, resulting in one of its factories to shut down and 800 employees told not to return to work for several weeks as a preventative measure to stop the spread of the virus.

Major factory shutdowns of automobile and electronic companies across South Korea are coming at a time when the global outbreak's center of gravity is shifting from Wuhan, China, to Daegu, South Korea.

South Korea has confirmed nearly 600 more cases of the virus on Friday, bringing its total to 2,337, making it the largest outbreak outside of mainland China.

Now that the virus is quickly spreading in South

As of Friday morning, the number of confirmed cases worldwide had passed 83,000, while the number of deaths topped 2,800.

Since yesterday, we we first noted this chart, the number of cases outside China has soared, particularly in South Korea and across Europe, as the number of new cases in mainland China (but outside Wuhan) dropped into the single digits. Vietnam joined the group of countries restricting South Koreans from entry, announcing Friday that it would stop issuing visas for South Koreans, according to CNN.

Of course, China still had nearly two months of lead time over the rest of the world, and it has been home to the bulk of cases so far.

Here's a rundown of deaths outside mainland China:

Iran: 34

Italy 17

South Korea: 14

Japan: 10 

Hong Kong and France: 2 each

The Philippines and Taiwan: 1 each

A WHO Spokesman said Friday that the coronavirus outbreak is 'getting bigger', and that the possibility of it reaching some 'if not all countries' is something that we have warned about for a while.

Every Brooklyn hipster who's been living in blissful ignorance of the pandemic unfolding all around them – dismissing every new warning as 'racist right-wing alarmism' – is about to start paying attention: The dog of a coronavirus patient in Hong Kong has been found to carry a "low level" of the deadly virus, according to a statement from the region's government.

You will find more infographics at Statista

According to the New York Post, researchers tested the dog's nasal

As of Friday morning, the number of confirmed cases worldwide had passed 83,000, while the number of deaths topped 2,800.

Since yesterday, we we first noted this chart, the number of cases outside China has soared, particularly in South Korea and across Europe, as the number of new cases in mainland China (but outside Wuhan) dropped into the single digits.

Of course, China still had nearly two months of lead time over the rest of the world, and it has been home to the bulk of cases so far.

Every Brooklyn hipster who's been living in blissful ignorance of the pandemic unfolding all around them – dismissing every new warning as 'racist right-wing alarmism' – is about to start paying attention: The dog of a coronavirus patient in Hong Kong has been found to carry a "low level" of the deadly virus, according to a statement from the region's government.

According to the New York Post, researchers tested the dog's nasal cavities and swabbed its mouth on Wednesday, and soon discovered that a test returned a "weak positive" for the samples.

"At present, the [Agriculture, Fisheries and Conservation Department] does not have evidence that pet animals can be infected with COVID-19 virus or can be a source of infection to people," Hong Kong’s government said in a press release.

Don't worry, dog lovers: The animal is being quarantined in a animal shelter holding no other animals. The pooch will remain under quarantine until it tests negative. Fortunately, it doesn't appear to be showing symptoms.

South Korea has confirmed an additional 571 cases of the novel coronavirus so far on Friday, bringing its total to 2,337, making it the largest

MSCI World Stocks collapsed from a record high into 'correction' in just five days.

The plunge in global equities has wiped out more than $5 trillion in value, or equivalent to nearly Japan's annual GDP. 

On Thursday afternoon, Guggenheim's Scott Minerd said, "this is possibly the worst thing I have seen in my career… it's hard to imagine a scenario in which you can contain the virus threat," adding that "Europe and China are probably already in recession and US GDP will take a 1.5-2.0% hit." 

"The stock market could be down 15-20%… and would likely force The Fed's hand."

Guggenheim's Scott Minerd says the coronavirus crisis is possibly the worst thing he's ever seen in his career: "This has the potential to reel into something extremely serious" pic.twitter.com/xLhhNm3u7t

— Bloomberg TV (@BloombergTV) February 27, 2020

MSCI ACWI is a market capitalization-weighted index with broad equity market exposure across the world, plunged 10% in the last five days, its biggest drop since August 2011…

The Dow Jones just saw its fastest collapse from an all-time peak since 1928, just ahead of The Great Depression.

And the S&P 500 suffered its fastest peak-to-correction plunge ever…

Perhaps record high valuations are unsustainable after all…

As for the Federal Reserve’s ‘Not QE’ last-ditch effort to prop the stock market up last fall, all equity gains have been erased.

As we noted yesterday, the worsening global threat from the virus prompted Goldman Sachs to revise its earnings growth story for 2020:

"US companies will generate no earnings growth in 2020. We have updated our earnings model to incorporate the likelihood that the virus becomes widespread. Our revised baseline EPS estimates are $165 in 2020 (previously $174) and $175 in 2021 (previously $183), representing 0% and 6% growth. Our reduced forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, supply chain disruption, a slowdown in US economic activity, and elevated uncertainty. Consensus forecasts imply EPS will climb 7% in 2020 and 11% in 2021." 

The drop in stocks shouldn't be a total surprised given the plunge in EPS expectations…

Global investors aren't waiting for economic data to hit to see how bad things have gotten since the virus has sent China into economic paralysis. They are selling first and asking questions later.