Closed Coronavirus: US government funds to accelerate pursuit of vaccine – as it happened

Hong Kong China Outbreak

FT live coverage of the coronavirus outbreak.

China coronavirus death toll passes 1,000

The death toll in China from coronavirus climbed to 1,016 by the end of Monday, health authorities said with 42,638 confirmed cases and 7,333 people in a serious condition.

Australian ear implant maker Cochlear takes hit from virus

The FT’s Jamie Smyth reports from Sydney:

Shares in Cochlear Limited fell 5 per cent on Tuesday when the Australian producer of hearing implants cut its 2020 earnings guidance due to the impact of the coronavirus on its Chinese business.

The company told investors hospitals across China, including Hong Kong and Taiwan, are deferring surgeries to limit the spread of the coronavirus, which would impact its cochlear implant business.

Net profit is now forecast at A$270-290m in full year 2020, compared to its previous forecast of A$290-300m.

“Limiting the risk of exposure to the virus is an appropriate precaution. While we cannot predict how long surgeries will be delayed, the low end of guidance factors in a significant decline in sales for Greater China for the second half,” said Dig Howitt, Cochlear chief executive.

Shares in Cochlear fell 5 per cent to A$232.44 when trading opened on the ASX on Tuesday.


China sacks top health officials in crisis-hit Hubei

Christian Shepherd reports from Beijing:

The Chinese Communist party has removed its top health officials in Hubei, the central Chinese province that is the centre of a new coronavirus outbreak, marking the most senior officials to be relieved from their post since the public health crisis began.

The provincial health commission’s Communist party secretary Zhang Jin* and the commission director Liu Yingzi were both stripped of their positions, China’s state broadcaster reported on Tuesday.

The two positions would both be filled by Wang Hesheng, a former deputy of China’s national health commission and a member of the emergency response group who has been parachuted in from Beijing to help tackle the virus.

The outbreak is quickly becoming one of the greatest challenges to Chinese President Xi Jinping’s rule since he took office in 2012, with public outrage being fuelled by the delayed response by officials in Hubei’s provincial capital Wuhan, where the first cases were confirmed, as well as by a sense of a coverup within the local health commission, which originally downplayed the severity of the virus.

*This post has been amended to correct Mr Zhang’s name.

Alibaba halts fees on Tmall marketplace, offers interest-free loans to Hubei merchants

Alibaba Group has said it will waive fees on its marketplace Tmall for the first half of 2020 and provide free services to merchants in Hubei, the centre of the coronavirus outbreak.

Its logistics arm, Cainiao, will waive warehouse rental fees before the end of March for Wuhan-based businesses. Its fintech arm, Ant Financial, will offer interest-free and low-interest loans to to sellers on ecommerce site Taobao and to Tmall merchants registered in Hubei. MYbank will provide one-year loans totalling Rmb10bn ($1.43bn) which will be interest free for three months, before rising to a reduced interest rate.

Couriers will receive “extra compensation” for their services as part of a Rmb1bn fund for supply chain and logistics services.

Taobao and Tmall struggled to keep up with the demand for medical supplies such as surgical masks as consumers rushed to stock up in January.

New York-listed Alibaba shares have fallen 6.4 per cent since a recent peak in mid-January.

Japan weighs options for quarantined cruise ship

Robin Harding reports from Tokyo:

The Japanese government is wrestling with how to handle the remaining 3,600 people quarantined on board the Diamond Princess cruise ship, after confirming another 65 cases yesterday for a total of 135. It has tested 439 people who showed symptoms or were exposed to existing cases.

Among the options under consideration by the health ministry are moving some of the older and highest risk passengers to quarantine in hospitals. It also wants to test all the remaining passengers but does not want to overwhelm the available laboratories and miss cases elsewhere.

Thailand denies cruise ship docking rights

John Reed reports from Manila:

Thailand has denied the Westerdam cruise ship the right to debark passengers because of concerns over the coronavirus.

Anutin Charnvirakul, the Thai deputy prime minister and health minister, announced the decision in a Facebook post on Tuesday morning, saying: “Permission to dock refused.”

On Monday Seattle-based Holland America Line, which operates the ship, had said it would be docking at Laem Chabang, Thailand’s biggest port, on February 13 to allow passengers to disembark and fly back to their home countries from Bangkok.

“The ship is not in quarantine and we have no reason to believe there are any cases of coronavirus on board despite media reports,” the company said.

The Westerdam, which has more than 2,000 passengers and crew on board, departed Hong Kong on February 1, and has already been denied docking rights in the Philippines, Taiwan, and Japan as concerns over the outbreak spread.

Hong Kong stocks rally 1% as investor sentiment recovers

Hong Kong and Chinese equities markets and commodities climbed on Tuesday, building on a rebound from recent lows as investors weigh the economic and corporate hit from the coronavirus outbreak.

Hong Kong’s Hang Seng index led the way, climbing 1.2 per cent in its first gain in the past three trading sessions. The CSI 300 barometer of stocks traded in Shanghai and Shenzhen climbed about 0.7 per cent.

The CSI 300 has rallied almost 8 per cent in the past six sessions, with the Hang Seng up around 5 per cent over that period. Both indices still remain around 5 per cent below their January peaks.

Brent crude, which has been hit recently by concerns that the outbreak will subdue demand in China, climbed 1.4 per cent on Tuesday to $53.99 a barrel. Copper, an important industrial metal seen as an economic bellwether, rose 1 per cent in early London Metal Exchange dealings, according to Bloomberg data.

Goldman Sachs said on Tuesday that “risk appetite” among investors has bounced back as “virus concerns fade.”

“The timing of the recovery is broadly in line with past epidemics, when equity recovered about three to four weeks from the outbreak,” the New York bank said.

“Additionally, our emerging markets team has found that Google searches peaked last week, which historically marked the trough in risky assets.”

Still, many investors remain deeply uncertain about the effect of the crisis on China’s economy — the world’s biggest emerging market.

Citigroup on Monday slashed its forecast for Chinese economic growth in the first three months of 2020 to a year on year rate of 3.6 per cent, from an earlier forecast of 4.8 per cent. It also trimmed its outlook for the year by 0.2 percentage points to 5.3 per cent.

“Wider and faster spread of novel coronavirus requires a reassessment of its economic impact,” the lender said, noting that developments since the end of January had been “worse than we had anticipated.”

It added:

Despite some initial positive signs like the decline of new suspected and confirmed cases, the unknown features of 2019-nCoV such as uncertainties about the incubation period, false negative results in testing and undetected channels for contagion suggest the turning point will be still days, if not weeks, away, not to mention the risk associated with the post-holiday massive transit.

Singapore braced for heavy tourism blow

Stefania Palma reports from Singapore:

Singapore expects visitor arrivals in 2020 to fall by 25 to 30 per cent, hitting a key sector for the country’s economy and one that is heavily supported by Chinese tourists.

Keith Tan, chief executive at the Singapore Tourism Board, said: “Singapore’s tourism sector is facing its biggest challenge since Sars in 2003. But unlike Sars, we are now better prepared and more resilient”.

The government will set up a taskforce including leaders in the private and public sectors to spur recovery in the tourism industry, which contributes 4 per cent to Singapore’s GDP.

Further measures will be included in the country’s budget, which will be announced on February 18, the STB said in a statement.

With China representing the biggest source of Singapore’s visitor arrivals – accounting for about a fifth of the total – the city state is particularly vulnerable to fallout from the virus outbreak.

Singapore was among the first countries to close its borders to China passport holders.

The STB has waived license fees for travel agents, tourist guides and hotels and offered to cover cleaning costs for hotels with suspected or confirmed cases in an effort to support the sector.

“It is more important than ever to invest in tourism…STB remains committed to our mid- to long-term tourism plans, to ensure that Singapore has a steady pipeline of new and repeat visitors,” said Mr Tan.

Hong Kong banks offer relief to customers hit by coronavirus

Primrose Riordan reports from Hong Kong:

With Hong Kong’s economy – which is in recession – suffering a double hit from both the protests and now the coronavirus, the government has been urging banks to give their customers a break.

This week banks including Standard Chartered and HSBC said they would be offering billions of dollars in relief measures to borrowers.

StanChart said last night it would allow clients with good repayment histories to make six months of interest-only mortgage payments, and would offer a similar moratorium on principal payments for some commercial loans.

The move follows an announcement by HSBC that it would provide more than HK$30bn ($3.9bn) in liquidity relief for businesses. This includes HK$10m in cash flow support for its trade finance customers and a moratorium on principal payments for commercial loans secured against property.

HSBC’s Hong Kong chief executive Diana Cesar said the circumstances were “unprecedented” and the bank would introduce further measures for personal customers.

Read more on this story.

Chart: Search interest in ‘coronavirus’

Google searches for the word ‘coronavirus’ appear to have have peaked last week, Goldman Sachs pointed out on Tuesday. The chart above, based on Google Trends data as of February 8, shows how search interest appears to have fallen dramatically since reaching a high late last month.

The term barely ranked at all on a global level before the virus began making headlines across the world on January 17.

News round-up

China has fired senior officials in Hubei province, the region at the centre of the coronavirus outbreak.

The party secretary for the Hubei Health Commission, and the head of the commission, were among those to have been fired so far.

The number of deaths from the virus continues to rise, with 103 reported in Hubei alone on Monday, which was a daily record. The total death toll within mainland China, according to the National Health Commission, has reached 1,016.

The number of new infections in China was 2,478 on Monday, a 20 per cent drop on the day before.

Outside of China there have now been 324 cases of the virus recorded in 24 countries, but just one death, the World Health Organization said in its latest report.

According to Hong Kong government data, the Chinese province most affected by the virus outside Wuhan is Guangdong, which is just across the border from Hong Kong.

There are far fewer confirmed cases in Hong Kong and Macau, at 42 and 10 respectively.

Still, Taiwan has barred entry from the two semi-autonomous Chinese regions out of concern about the high number of infections in southern China.

Cruise ship passengers continue to be affected by efforts to rein in the spread of the virus. There are still 3,600 people quarantined on the Diamond Princess, which is moored at Yokohama in Japan and which has 135 infected passengers.

Earlier on Monday the Thai government decided not to allow passengers to disembark from the Westerdam cruise ship, which had also been denied permission to dock in Japan.

Japan cases highlight diagnosis uncertainties

Japan has confirmed two more coronavirus cases among the citizens it evacuated from Wuhan, highlighting the uncertainty around diagnosing the disease and the possibility of lengthy incubation periods, writes Robin Harding in Tokyo.

One case, a man in his 50s, returned to Japan on the first evacuation flight on January 29. He tested negative on January 30 and went into quarantine. On February 7, he developed a fever and was admitted to hospital, but again tested negative for the virus. He finally tested positive on February 10.

Another case, a man in his 40s, was on the second evacuation flight and returned to Japan on January 30. He also tested negative and went into self-quarantine at home. On February 8, he developed a fever and took over-the-counter medicine, which reduced his temperature. But on February 10, an X-ray showed pneumonia in both lungs. He was admitted to hospital and tested positive for the virus.

The cases take the total diagnosed among Japan’s Wuhan evacuees to 12, out of a total of 764 evacuees.

European stocks post early gains

European stock markets recorded firm gains at the open, adding to a global rebound as investor concerns over the coronavirus impact ease.

The Stoxx 600 index rose 0.6 per cent to take it to a fresh record, with gains across the continent’s major bourses. The index which tracks Europe’s biggest 600 companies has now risen 4 per cent this month.

Goldman Sachs said on Tuesday that “risk appetite” among investors has bounced back as “virus concerns fade”.

Hong Kong’s Hang Seng index led the way in Asia, climbing 1.4 per cent in its first gain in the past three trading sessions. The CSI 300 barometer of stocks traded in Shanghai and Shenzhen climbed about 1 per cent, taking its gains over the past six sessions to nearly 8 per cent.

“The question is whether the V shape recovery in equities and implied V shape in growth are warranted,” said Sébastien Galy, a strategist at Nordea Asset Management.

“Such paths are a function of systematic strategies, a buy on dip mentality borne out of years of equity market performance and studies of natural disasters.”

Moody’s: Virus expected to have muted impact on Europe and America

Katharine Gemmell writes:

Moody’s believes the outbreak of coronavirus will have a “muted” economic impact on Europe and the Americas because of modest trade and tourism links to China.

“Our baseline assumption is that the economic effects of the outbreak will continue for a number of weeks, after which they will tail off and normal economic activity will resume,” the rating agency said in a report on Tuesday.

Moody’s found that Asia Pacific economies were particularly exposed because of strong links to China and that the virus posed increasing risks to the growth outlook of many countries within it.

Anushka Shah, a vice president and senior analyst at Moody’s, said:

The most immediate economic implications from the coronavirus outbreak will manifest through a fall in tourist arrivals from, and weaker exports of goods to China and other economies integrated into the Chinese supply chain.

With the outbreak assumed to continue for a number of weeks, Moody’s predicts that GDP growth will fall significantly in Hong Kong and Macao because of strong trade and tourism flows.

Ms Shah added:

However, the buffers available to most sovereigns that are particularly exposed through the trade and tourism channels are also relatively strong, meaning credit-negative implications will be limited.

Moody’s suggested that if the outbreak is prolonged it could cause “significant second-round economic effects” that would hurt countries with already weak credit profiles and disrupt supply chains globally.

Coronavirus mapped: the latest figures as the outbreak spreads

The humanitarian costs of the coronavirus outbreak have continued to mount, with more than 40,000 people infected in China alone, where the outbreak originated. The number of people who have been confirmed to have died as a result of the virus has now passed 1,000. 

The FT is mapping the coronavirus as it spreads.

Check back for our up-to-date figures.

InterDigital withdraws from Mobile World Congress

US technology patent company InterDigital has withdrawn from the Mobile World Congress in Barcelona, becoming the latest international company to pull out of the gathering because of coronavirus concerns.

Nasdaq-listed InterDigital said “nothing is more important to us than the health and welfare of our employees” as it announced its non-attendance.

The annual gathering in Spain has been rocked by the withdrawal of major companies including Sony, Amazon, LG and Ericsson. Industry body GSMA is now under pressure to cancel a conference that draws more than 100,000 visitors under normal circumstances, with thousands from China and other parts of Asia.

You can read more on the cancellations rocking the smartphone event from the FT’s Nic Fildes.

Foxconn return to full production set to take ‘weeks’

Ryan McMorrow in Beijing, Kathrin Hille in Taipei and Tom Mitchell in Singapore report:

Foxconn, the maker of Apple’s iPhone, is recalling its factory workers in phases to its assembly lines as China struggles to revive the world’s second-largest economy from the paralysis wrought by the spread of the coronavirus.

But for Foxconn, China’s largest private sector employer with more than 1m employees, a return to full production “will take weeks”, said one person at the company with knowledge of the matter. 

Analysts warned that China’s prolonged shutdown, which started three weeks ago with the quarantine of Wuhan — the city at the centre of the outbreak — could delay the launch of Apple’s next iPhone, planned for March.

Most of China officially returned to work on Monday, but the scale of the resumption has varied. On Tuesday, the state planning ministry instructed provinces and cities to resume work at their own discretion based on the spread of the virus.

Large employers such as Foxconn faced official checks and constantly changing policies focused on halting the spread of the coronavirus. 

Foxconn declined to comment on individual factories. In a statement, it said:

The group is closely co-operating with the respective local authorities’ requirements . . . and is resuming work in an orderly fashion and in batches.

To read Ryan, Kathrin and Tom’s full report, click here

Coronavirus epidemic hits China dealmaking and IPOs

Hudson Lockett in Hong Kong and George Hammond in Tokyo write:

The coronavirus epidemic has cast a chill over dealmaking in China, causing the number of acquisitions and initial public offerings to tumble as bankers are barred from travel and face-to-face negotiations remain impossible for fear of spreading the disease.

Investment bankers and lawyers said the outbreak had prompted buyers to hold off on acquisitions in the hope of snapping up assets at a lower price, and threatened to delay high-profile listings including Megvii, the $4bn Chinese facial recognition company. 

The rapid spread of the virus could “take the wind out of the sails” of M&A activity in Asia more broadly after a “very bullish start to the year”, according to one Hong Kong-based banker at a European bank. A number of deals in the region are in train, including the sale of Tesco’s Thai and Malaysian business that could attract bids in the region of $10bn, according to people familiar with the matter.

Read the full story.

Chinese companies face audit deadline problem, says accountancy group

A Hong Kong accountancy group calling for an extension of reporting deadlines due to the coronavirus outbreak has said that some listed Chinese companies could be forced to suspend trading as they are unlikely to be able to comply with the requirements, writes Primrose Riordan in Hong Kong.

“If the listed [businesses] are not able to come up with their financial information as required then the share trading will be suspended, so there may be big numbers of companies that are not able to comply,” Hong Kong Business Accountants Association vice president Ernest Ip said.

About half the companies on the Hong Kong Stock Exchange have substantial operations in China, according to the association, which is seeking an urgent meeting with regulators over the issue.

Mr Ip said moves by regulators and the stock exchange to introduce more lenient conditions for the March 31 reporting deadline do not go far enough and put the health of auditors at risk as it encourages companies to send staff over to mainland China to visit their offices in order to finish the reports despite any possible threat from the virus.

The Securities and Futures Commission and the Hong Kong Stock Exchange said in a joint release last week that they would accept financial statements that have not yet been passed by auditors so trading could continue. They urged companies that are struggling to get their accountants into offices or across borders in time to contact them.

Mr Ip said the measures were positive but a blanket extension of the deadline until late April was needed as boards would be uncomfortable with signing off on statements that had not been agreed to by auditors.

Bouygues becomes latest telecoms group to opt out of trade show

Bouygues Telecom, one of France’s largest telecoms companies, has pulled out of the Mobile World Congress in Barcelona, write Nic Fildes and Leila Abboud.

The network, which sends around 20 people to the event, is the latest company to opt out of MWC as concerns mount over the spread of the coronavirus. The illness has claimed more than 1,000 lives.

The company confirmed that it would no longer attend the congress, the world’s largest telecoms trade show and a critical event for the industry. Bouygues’ decision could put pressure on other European carriers, such as Orange and Vodafone, to follow suit.

NTT DoCoMo, the Japanese telecoms company, said this week it would not attend and other Asian networks have also decided against going to Barcelona.

Why are markets rallying?

Global stocks have marched higher even as the death toll in China from the coronavirus outbreak has exceeded 1,000 and analysts have struggled to quantify the impact from the disruption to the world’s second largest economy.

At the heart of the move higher is a belief the impact will be temporary, limited to China’s immediate neighbours and that global central banks will help smooth over any wider impact in any event.

Sebastian Galy, a strategist at Nordea Asset Management, said investors are displaying “a buy on dip mentality borne out of years of market performance and studies of natural disasters” which tend to have a short, sharp impact.

Economists at Goldman Sachs said in a note to clients, released on Tuesday, that the timing of the market recovery “is broadly in line with past epidemics, when equity recovered about three to four weeks from the outbreak”.

The Wall Street bank said that Google searches about the outbreak peaked last week, “which historically marked the trough in risky assets”.

European and US stocks have touched fresh records in recent sessions, snapping back from a late January selloff when concerns over the disease’s spread first hit global markets. In contrast, markets in mainland China and Hong Kong have rallied but remain around 5 per cent below their January peaks.

Rating agency Moody’s said on Tuesday that it expects the economic impact of the virus to have “a muted impact” on Europe and the US, but have a direct effect on growth in Asian Pacific countries.

China’s food delivery workers provide lifeline to quarantined

Yuan Yang reports from Beijing:

For the tens of millions of Chinese people quarantined at home by the coronavirus epidemic, food deliveries and the people who prepare and deliver them are essential routes to the outside world.

But many shut-ins want to be sure that while their food is hot, the people providing it are not. In addition to the usual price and other information, many restaurants are also including a “reassurance guarantee” slip with the temperatures of the cooks, food packagers and courier for every order.

Shaun Rein, managing director of China Market Research Group, said:

These couriers have become the heroes of China along with the medical professionals … The online food retailers have calmed the country down more than anyone, even the government, because they are showing people they can buy food at reasonable prices.

Meituan, the industry leader and China’s third most valuable publicly listed technology company, gives its couriers a card to pin to the yellow jacket of their uniforms that details their temperature and whether they have conducted the daily disinfecting of their delivery box. Eleme, Alibaba’s rival service, does the same.

Many restaurants have opted to provide additional information on their own hygiene practices. Yunhaiyao, a popular food chain, says it measures the temperature of the cook, the food packager and the courier for every order. The restaurant writes the data along with the staff members’ names on a slip of paper.

Read Yuan’s full piece here

Under Armour warns of $50-60m blow to sales from virus

Under Armour has become the latest retailer to warn of a hit to sales from the coronavirus spread as it estimated a knock of at least $50-60m in the first three months of the year.

The sportswear group joins a list that spans a host of clothing groups — including Moncler, Burberry and Canada Goose — to warn sales will come under pressure from the shutdown the virus has triggered in China.

Under Armour’s $50 to $60m estimate applies only to the current quarter but the group warned the effects could spill into the rest of the year.

It said:

Given the significant level of uncertainty with this dynamic and evolving situation, full year results could be further materially impacted.

The group made the warning on the impact from the virus as it said overall revenue would shrink in 2020 amid falling sales in North America. Shares were down 12 per cent in pre-market trade.

Singapore reports two new cases

Stefania Palma in Singapore reports:

Singapore has reported two new confirmed cases, taking the total to 47.

They involve two people with no recent travel history to China, one of whom is linked to an infected individual.

One case is a 35 year old male permanent resident who lives in Johor Bahru, Malaysia but works in Singapore. The other is a 39 year old Bangladeshi man who worked at the same location where a previously confirmed case with the same nationality had worked.

Ten of Singapore’s 25 locally transmitted cases show no links to infected individuals or people with travel history to mainland China. Nine confirmed cases have recovered and have been discharged, while seven are in critical condition. Most of the remaining patients are stable or improving.

Westerdam cruise ship in limbo after Thailand refuses docking

Robin Harding in Tokyo, Nicolle Liu in Hong Kong and John Reed in Manila report:

The cruise ship Westerdam is criss-crossing the South China Sea with no port to call home after Thailand became the latest country to turn it away for fear of the coronavirus.

Earlier today the vessel with more than 2,000 passengers and crew on board was off the southern tip of Vietnam, having already been turned away from Japan — its original destination — and the Philippines.

The Westerdam is being shunned despite having no confirmed cases of the virus that infected passengers on another cruise ship, the Diamond Princess, which is now being held in quarantine in the Japanese port of Yokohama.

The cruise ship’s plight shows how growing public anxiety over the new pathogen has prompted governments to announce ever more stringent measures to signal their determination to keep the virus at bay.

“Permission to dock refused,” declared Anutin Charnvirakul, the Thai deputy prime minister and health minister, wrote in a Facebook post referring to the ship on Tuesday.

Seattle-based Holland America Group, which operates the Westerdam, said it was aware of Thailand’s declaration and was “actively working” on a resolution. “We know this is confusing for our guests and their families and we greatly appreciate their patience,” it said.

Click here for more on this story.

Death toll from coronavirus infection creeps up

The coronavirus infection has tightened its grip especially in China, with humanitarian costs mounting as the death toll surpasses 1,000 and more than 43,000 cases confirmed.

In Hubei province, where the first cases were detected, 974 have died. Nearly 4,300 have recovered from the illness.

From the latest story on, here is an updated map from the Financial Times, as set out by Steve Bernard and Cale Tilford:

Figures come from the John Hopkins University Center’s dashboard.

Wall Street opens higher on easing coronavirus fears

US equities have followed their Asian and European counterparts higher as a relief rally on easing investor concerns over the coronavirus boosted global markets.

The S&P 500 added 0.4 per cent shortly after the open, mirroring similar moves in stock markets elsewhere in the globe.

Economists at Goldman Sachs said on Tuesday in a note to clients the timing of the market recovery “is broadly in line with past epidemics, when equity recovered about three to four weeks from the outbreak”.

In Asia, Hong Kong’s Hang Seng index closed up 1.3 per cent to post its first gain in the past three trading sessions. The CSI 300 index of Shanghai- and Shenzhen-listed stocks gained 0.9 per cent.

In Europe the Stoxx 600 was recently up 0.8 per cent, with London’s FTSE 100 and Frankfurt’s Dax 30 adding 0.8 and 0.9 per cent.

Emoticon WHO names virus ‘Covid-19′

The new coronavirus has been named Covid-19 by the World Health Organisation.

Scientists had to find a name “that did not refer to a geographical location, an animal, an individual or group of people, and which is also pronounceable and related to the disease,” said Tedros Adhanom Ghebreyesus, director-general of the WHO.

Having a name matters to prevent the use of other names that can be inaccurate or stigmatising. It also gives us a standard format to use for any future coronavirus outbreaks.

Fed ‘closely monitoring’ risk from coronavirus outbreak

Brendan Greeley in Washington reports:

Federal Reserve chairman Jay Powell said the central bank is “closely monitoring” the risks to the US economy from the coronavirus outbreak in China that has threatened to dampen growth around the world.

“Risks to the outlook remain,” Mr Powell said in prepared testimony for a hearing before the House financial services committee.

In particular, we are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy.

The Fed had previously flagged the possibility that the outbreak in China could have an effect on the US in its monetary policy report to Congress, released last Friday.

US government allows employees to leave Hong Kong

The US will allow government employees to leave Hong Kong due to the outbreak of coronavirus, a spokesperson for the state department said.

The state department on Tuesday authorised the voluntary departure of non-emergency personnel and their families from the US consulate general in Hong Kong.

The decision was made “out of an abundance of caution related to uncertainties associated with the 2019-nCoV outbreak and to ensure the safety and security of US government personnel and family members”, the spokesperson said.

The authorisation gives staff the option of leaving if they wish. The consulate will remain open to the public.

Testing mix-up caused mistaken release of infected patient in US

A person who was infected with coronavirus was mistakenly released from a California hospital after a possible mix-up with the initial lab test.

The patient, who had been evacuated out of China and brought to Marine Corps Air Station Miramar in San Diego last week, had limited contact with other individuals in a federal quarantine but an investigation is ongoing, according to Dr Anne Schuchat, the CDC’s principal deputy director.

“It turns out there was probably a mix-up, and the original test wasn’t negative. But there’s been a new test collected in order to understand whether the person is still symptomatic,” Dr Schuchat told reporters at a news conference in Washington.

Four people were hospitalized in California after showing symptoms and underwent tests by the CDC. They were later released to quarantine facilities.

One of the four individuals was returned to the hospital and put in isolation after health officials determined the person had tested positive. It was the 13th confirmed case of coronavirus in the US.

Dr Schuchat also said people who were on the US government’s first evacuation flight out of China are due to be released sometime today after being under quarantine for two weeks. Officials will evaluate the individuals to ensure they remain symptom-free.

China asks nations to avoid protectionist trade measures amid outbreak

By James Politi

China on Tuesday asked WTO members to avoid any protectionist measures against Beijing in reaction to the coronavirus outbreak, according to a Geneva-based trade official.

Beijing made the appeal at the end of a meeting of the WTO committee on trade facilitation, saying it hoped WTO members will abide by WTO rules, respect the authority and professional advice of the World Health Organisation, and refrain from overreacting and imposing unnecessary trade restrictions, according to the official, who added that there was no response from other members of the global trade body.

American Airlines extends cancellation of China flights until late April

American Airlines extended the suspension of its flights to and from China into April “due to the reduction in demand”.

The company said flights between US hubs and mainland China, as well as between Los Angeles and Hong Kong, are cancelled until after April 24. Service between Dallas-Fort Worth and Hong Kong is suspended until after April 23.

“We will continue to evaluate this schedule and make any adjustments as necessary,” American Airlines said in a statement.

American Airlines previously cancelled flights to and from mainland China and trips between Hong Kong and Los Angeles until late March. It had planned to resume flights between the Dallas area and Hong Kong next week.

Several major airlines have suspended service to China amid concerns over the spread of coronavirus. Yesterday, British Airways scrapped all flights to mainland China until the end of March.

How coronavirus’s economic cost compares with past outbreaks

The coronavirus outbreak’s cost to the Chinese economy may be nearly triple the impact of swine flu, according to an analysis by consultancy Bain & Company.

The group said coronavirus could cut 0.2 to 0.5 percentage points from China’s GDP. That’s equivalent to between Rmb300bn and Rmb500bn, or about $43bn to $72bn.

Previous outbreaks cost the Chinese economy far less, with estimates for swine flu and Sars pegged at Rmb170bn and Rmb100bn, respectively.

“In financial terms, the biggest difference between this outbreak and SARS is the size of China’s economy, which was RMB 13.74 trillion in 2003. SARS reduced China’s GDP by almost 1% or approximately RMB 100 billion. In 2003, however, China represented just 4% of global GDP,” Bain & Company said in a report.

China’s economy is seven times larger today, makes up more than 16 per cent of global GDP and “plays a critical role in many global supply chains”, it added.

Bain & Company advised businesses to avoid a “wait-and-see approach” and act immediately by adjusting plans for 2020 and protecting employees, among other measures.

First American evacuees released from quarantine

The Americans who were on the first evacuation flight out of China have been released from quarantine.

A top official at the CDC signalled earlier on Tuesday that all 195 individuals, who were flown from China on January 29, would likely be allowed to leave March Air Reserve Base in California today after completing a two-week quarantine. No one in the group was diagnosed with coronavirus.

A health official from Riverside County in California tweeted a photo of the evacuees celebrating their release like it was a graduation ceremony, tossing surgical masks into the air:

Hundreds of American evacuees remain quarantined at other military bases.

Impact of virus on US GDP growth to be ‘modest’ – S&P Global

The potential impact of the coronavirus on US economic growth is expected to be modest, but will mostly fall in the first quarter, according to Standard & Poor’s, which has cut its forecasts for gross domestic product in part because of the outbreak of the disease.

The ratings agency now forecasts annualised growth in the first quarter of 1 per cent, compared with a previous forecast of 2.2 per cent, but the assessment depends on “the path of the virus and its longevity”, which is “highly uncertain”.

Beth Ann Bovino, US chief economist at S&P Global, said: “We expect most of the drag on US growth to be in the first quarter, with a smaller hit in the second quarter and a rebound in the latter half.”

S&P said the effect on the US was expected to be “modest given its limited exposure to the virus so far”.

S&P said the revision to the forecasts was not solely because of the coronavirus. The suspension of Boeing 737 Max production and exports are forecast to wipe 0.5 percentage points from growth in the current quarter “with further weakness in the second”.

“It is anyone’s guess when the jet will receive a greenlight from the regulators to fly; S&P Global’s assumption for now is that production and delivery will resume in July at the earliest. For the year, the lost productivity from Boeing in the first and second quarters will likely add further drag to our baseline growth forecast.”

S&P 500 closes at record high

US stocks closed at record highs as investors calmed their nerves over the coronavirus outbreak that has swept across Asia.

The gains followed record closes for a number of European indices, and a continued rebound for equities in Hong Kong and China, where the number of new cases of the disease again slowed.

On Wall Street, the S&P 500 finished 0.2 per cent higher on Tuesday, a new peak. The benchmark had been up as much as 0.7 per cent earlier today.

The Nasdaq Composite added 0.1 per cent to a record close, while the Dow Jones Industrial Average ended flat.

Jay Powell, Federal Reserve chairman, said in testimony to lawmakers on Tuesday that the central bank found “the US economy in a very good place, performing well”. He said the bank was “closely monitoring” the coronavirus situation, but resisted the urge to speculate on the extent of disruptions it might have on the US.Government bonds were weaker, with investors spurning haven assets.

The yield on the benchmark 10-year US Treasury was up 4.8 basis points at 1.5954 per cent, while that on the two-year sat at 1.4173 per cent, nursing a 4bp rise.

J&J receives US government funds to accelerate pursuit of vaccine

By Hannah Kuchler

Johnson & Johnson will receive US government funds to help accelerate its pursuit of a vaccine for Covid-19, the new coronavirus.

The world’s largest healthcare company is expanding an existing partnership with the US Biomedical Advanced Research and Development Authority, known as BARDA, which helps the country address health emergencies.

Paul Stoffels, chief scientific officer of Johnson & Johnson, said it is also in discussions with other partners to make it accessible to China and other parts of the world.

“This partnership will ensure that vital research is made possible at rapid speed and underscores the importance of public-private partnerships to tackle the worldwide novel coronavirus epidemic,” he said.

J&J is the only major pharmaceutical company that has said it will try to develop a vaccine for the virus causing the outbreak. It has previously said it would expect a vaccine to be ready to test in humans within eight to 12 months.

Much smaller biotech companies are also working on candidates for a vaccine, including Moderna Therapeutics, which has a partnership with the US National Institute of Health. Biotech companies, which specialise in research and development, often rely on pharma partners to market and manufacture a drug or vaccine.

On Tuesday, a top US health official criticised the pharma industry for not stepping up and promising to manufacture a vaccine if the NIH succeeds in developing one. According to pharma trade publication STAT News, Dr Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, spoke out on a panel at the Aspen Institute in DC, saying it was “very difficult and very frustrating.”