Goldman Sachs is warning that the coronavirus outbreak in China will have a larger drag on 2nd quarter growth and that the “risks are clearly skewed on the downside”:

GOLDMAN: we have “increased our estimated growth drag from the #coronavirus given the slower than expected pickup in Chinese activity and travel. We now estimate a 0.8pp growth drag in Q1 (from 0.5-0.6pp previously). “.. the risks are clearly skewed to the downside ..” pic.twitter.com/p6EshrcMmJ — Carl Quintanilla (@carlquintanilla) February 23, 2020

The risk is what happens to manufacturing around the world, including the U.S., when inventories run out:

2. Goldman adds this.. unnerving.. nugget about why the supply-chain impact of #coronavirus could become “non-linear” should it last into Q2 Global production “is likely to remain largely unaffected until inventories [from China] run out, after which production may fall sharply” — Carl Quintanilla (@carlquintanilla) February 23, 2020

A “non-linear” drop means like when you fall off a cliff:

I have been reading bank research for many years. They don't like to give out bad news. When they do, they are cautious, guarded. I really don't like that phrase "non-linear" at all. https://t.co/XJ4Wopbrq4 — James Pethokoukis (@JimPethokoukis) February 23, 2020

Companies are already seeing this happen:

94% of the Fortune 1000 are seeing coronavirus supply chain disruptions https://t.co/BUFRqCerzD — Jeff Giesea? (@jeffgiesea) February 22, 2020

Long term, this may shift manufacturing away from China (and hopefully to the U.S.):

White House trade adviser Peter Navarro says the coronavirus crisis shows the U.S. has off-shored too much of its supply chain https://t.co/elHvPpybx5 — Bloomberg (@business) February 23, 2020

With new hot spots in Iran, Italy and South Korea, is it already a pandemic? From Vox:

NEW: A growing number of public health experts say #covid19 is probably impossible to stop, and that we're looking at a pandemic: https://t.co/JMEe9j4b8r Why? Allow me to thread: — Julia Belluz (@juliaoftoronto) February 23, 2020

TL;DR? Yes, it’s a pandemic . . . but don’t panic. Yet:

New and growing outbreaks in Italy, Iran, South Korea, and on the cruise ship in Japan show how highly contagious this virus is, and how cases may be lurking silently in countries around the world. But there's more reason to believe we're tilting toward or in a pandemic… — Julia Belluz (@juliaoftoronto) February 23, 2020

1) Countries are still mostly looking for the disease in people who’ve traveled from China. That means they're likely missing cases. 2) Flu season ongoing, this virus looks like flu, and it's possible cases are being missed that way, too… — Julia Belluz (@juliaoftoronto) February 23, 2020

3) Many countries are only now getting testing up and running 4) Some people may have abdominal pain before respiratory symptoms — and that’s not something health officials are screening for… — Julia Belluz (@juliaoftoronto) February 23, 2020

5) China may also see another surge in cases soon as travel restrictions are gradually lifted 6) SARS containment worked because people were only contagious after they got sick; with #Covid19 people seem to be contagious early in illness or even when asymptomatic… — Julia Belluz (@juliaoftoronto) February 23, 2020

So that's why @mtosterholm said the fact that extraordinary measures to contain this virus haven’t worked doesn’t mean containment failed. “Containment never had a chance because of the influenza-virus like transmission.” — Julia Belluz (@juliaoftoronto) February 23, 2020

It's why @LawrenceGostin said: “We are at a turning point in the Covid-19 epidemic… We must prepare for the foreseeable possibility, even probability, that Covid-19 may soon become a pandemic affecting countries on virtually all continents.” — Julia Belluz (@juliaoftoronto) February 23, 2020

And why @NIAIDNews Anthony Fauci said, "When several countries have widespread transmission, then spill-over to other countries is inevitable." — Julia Belluz (@juliaoftoronto) February 23, 2020

So what happens now? Countries need to move from trying to contain the virus to mitigating its harm — reducing the spread, and caring for the very sick. “It is beyond time,” said @JenniferNuzzo. — Julia Belluz (@juliaoftoronto) February 23, 2020

Hospitals need to be ready with Covid-19 protocols, healthcare workers need to be protected with access to protective equipment such as face masks/gowns, and instead of travel bans, countries need plans for maintaining supply chains and carrying on with travel and trade… — Julia Belluz (@juliaoftoronto) February 23, 2020

Your weekly reminder: a pandemic doesn't mean it's time to panic. We don't know how severe #covid19 is. It's likely the severity/2 percent case fatality rate will decrease as countries find more mild cases. Countries just need to do all they can to be ready. END — Julia Belluz (@juliaoftoronto) February 23, 2020

Oh, and keep your eyes on the Olympics:

Will the 2020 Olympics be cancelled? Coronavirus fears mean Tokyo Games couldn't be held now, says scientist https://t.co/x3suf3Z4Zi — Newsweek (@Newsweek) February 19, 2020

To be continued. . .

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