Coronavirus Dashboard - Jack Janasiewicz, CFA Garrett Melson, CFA - Natixis Investment Managers
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Jack Janasiewicz, CFA®
Portfolio Strategist
Garrett Melson, CFA®
Associate Portfolio Strategist
Coronavirus Dashboard
Portfolio Research and Consulting Group
Natixis Investment Managers FOR FINANCIAL PROFESSIONALS ONLYIssue What We Are Watching Comments Risk
• Fatality rate – will the virus • Confirmed cases likely underreported
prove to be more deadly than • Only most serious cases being Second Wave:
• Data integrity – do we trust China’s suspected? admitted and reported
numbers? • New confirmed cases – how • Capacity constraints imply those with • Quarantines lifted,
• Quality of reporting – is the data contagious is the virus? mild symptoms sent home factories
Hubei properly characterized? • Consumer confidence/ • Fatality rate artificially high given
• Access to care – does Hubei have business sentiment – are restarting, public
those with mild symptoms not
enough hospital space and staff to individuals/business resuming transportation
registered and sent home
effectively deal with outbreak? normal behavior? • Rate of contagion appears to be filling
• Are cases re-emerging – declining – watching for second wave
second infection cycle? • Increased public
• New confirmed cases – is the contact leads to
virus spreading outside of reacceleration of
• Data outside of Hubei broadly reliable
China ex- • Data integrity – do we trust China’s Hubei? contagion in
• Failure to report is punishable
numbers? • Consumer confidence/
Hubei • World Health Organization has China
• Quality of reporting – is the data business sentiment – are
endorsed data
properly characterized? individuals/business resuming
• Rate of contagion rapidly declining • Signs virus may
normal behavior?
• Recovery trends be asymptomatic
• New confirmed cases – is the
• Data integrity – quality of data much
• Possible longer
virus spreading outside of • Developed World – better equipped
stronger. China? to deal with virus
incubation period
Rest of • Access to quality care – greater • Singapore – indicator of • Access to better care and more
number and higher quality of care ability of developed providers
World • Belated overreaction
Hotspot flareups economies to respond • Emerging World – ill-equipped to
• Will the US see an deal with outbreak, watching Africa by markets.
outbreak?
Source: Natixis PRCG.
FOR FINANCIAL PROFESSIONALS ONLYKey Risk: Duration of outbreak
How long it takes to show virus is under control will determine economic impact.
Duration of
Duration of
Weeks Months
outbreak
outbreak
U Shaped W Shaped L Shaped Elevator
Recovery Recovery Recovery Shaft
Recovery
• Short term pain for long term • Contagion spreads modestly • Contagion spreads overseas • Contagion spreads
gain overseas as second wave spreads significantly overseas
• Draconian measures prove • Draconian measures prove throughout China • Sudden stop of economic
successful in stemming successful in initially • Harsher response from activity triggered by
contagion stemming contagion but Chinese authorities grinds aggressive measures to limit
• Reported cases peak soon second wave in China domestic economy to halt contagion
• PBoC policy stimulus puts emerges as quarantines are • Foreign governments • Global monetary policy
floor under consumer and lifted impose stricter controls on ineffective in supporting risk
business confidence and • Global supply chains/risk travel/imports/business with appetite/consumer
supply chains come back appetite/consumer and China and impose own confidence/business
online in a reasonable time business sentiment dented measures to limit spread of sentiment and are unable to
period • Global fiscal and monetary virus within their borders counter supply shock
• Buy the Dip mentality and stimulus puts floor under • Global monetary policy helps • Nascent global economic
Fear Of Missing Out provide consumer and business support risk appetite/ recovery reverses and
the backdrop for a sharp confidence and supply consumer and business recession fears re-emerge
recovery in risk assets chains come back online sentiment to offset demand
after a limited delay shock but unable to counter
supply shock
• Tourism/commodities suffer
Source: Natixis PRCG.
FOR FINANCIAL PROFESSIONALS ONLYDaily Change in Confirmed Cases Daily Change in Confirmed Cases: Hubei
2,000 16,000
China ex-Hubei
1,800 14,000 Spike from CT scan
Rest of World confirmed cases
1,600
12,000
1,400
# of Persons
# of Persons
1,200 10,000
1,000 8,000
800 6,000
600
4,000
400
200 2,000
0 0
1/22 1/25 1/28 1/31 2/3 2/6 2/9 2/12 2/15 2/18 2/21 2/24 2/27 3/1 1/22 1/25 1/28 1/31 2/3 2/6 2/9 2/12 2/15 2/18 2/21 2/24 2/27 3/1
Confirmed Cases Fatality Rate
100,000 6.0%
Total
China ex-Hubei
5.0%
# of Persons (log scale)
10,000 Hubei
% of Confirmed Cases
4.0%
1,000
3.0%
100
China ex-Hubei 2.0%
Hubei
10
Rest of World 1.0%
1 0.0%
1/22 1/25 1/28 1/31 2/3 2/6 2/9 2/12 2/15 2/18 2/21 2/24 2/27 3/1 1/22 1/25 1/28 1/31 2/3 2/6 2/9 2/12 2/15 2/18 2/21 2/24 2/27 3/1
Source: Natixis PRCG, John Hopkins University. Data as of 3/2/20. Note: Confirmed cases in Hubei province include CT clinically
confirmed cases between 2/12/20 and 2/18/20 (spike in daily change reflects prior CT confirmed cases).
FOR FINANCIAL PROFESSIONALS ONLYConfirmed Cases: Hot Spots Daily Change in Confirmed Cases: Hot Spots
5,000 900
Japan Japan
4,500 800
South Korea South Korea
4,000 700
Iran Iran
3,500
Italy 600
# of Persons
# of Persons
3,000 Italy
Singapore 500
2,500 Singapore
400
2,000
300
1,500
1,000 200
500 100
0 0
1/22 1/25 1/28 1/31 2/3 2/6 2/9 2/12 2/15 2/18 2/21 2/24 2/27 3/1 1/22 1/25 1/28 1/31 2/3 2/6 2/9 2/12 2/15 2/18 2/21 2/24 2/27 3/1
Confirmed Cases: By Region Daily Change in Confirmed Cases: By Region
6,000 900
North America Latin America North America Latin America
800
5,000 Europe Asia ex-China
Europe Asia ex-China 700
Australia/New Zealand Middle East/Africa
4,000 600
# of Persons
# of Persons
Australia/New Zealand Middle East/Africa 500
3,000
400
2,000 300
200
1,000
100
0 0
1/22 1/25 1/28 1/31 2/3 2/6 2/9 2/12 2/15 2/18 2/21 2/24 2/27 3/1 1/22 1/25 1/28 1/31 2/3 2/6 2/9 2/12 2/15 2/18 2/21 2/24 2/27 3/1
Source: Natixis PRCG, John Hopkins University. Data as of 3/2/20.
FOR FINANCIAL PROFESSIONALS ONLYChina As a Roadmap?
Daily Change in Confirmed Cases
(1/20/20 - 3/2/20)
4,000 4,000
3,500 3,500
China (Advanced 1M) Rest of World
3,000 3,000
2,500 2,500
# of Persons
# of Persons
2,000 2,000
1,500 1,500
1,000 1,000
500 500
0 0
1/20 1/24 1/28 2/1 2/5 2/9 2/13 2/17 2/21 2/25 2/29 3/4 3/8 3/12 3/16 3/20 3/24 3/28 4/1
Source: Natixis PRCG, John Hopkins University. Data as of 3/2/20.
FOR FINANCIAL PROFESSIONALS ONLYMainland China Case and Mortality Rate by Age Group
As of February 11, 2020
Confirmed Cases Deaths
Age Group Confirmed Cases (#) Deaths (#) Case Fatality Rate
(% of Total Cases) (% of Total Deaths)
0-9 416 0.9% 0 0.0% 0.0%
10–19 549 1.2% 1 0.1% 0.2%
20–29 3,619 8.1% 7 0.7% 0.2%
30–39 7,600 17.0% 18 1.8% 0.2%
40–49 8,571 19.2% 38 3.7% 0.4%
50–59 10,008 22.4% 130 12.7% 1.3%
60–69 8,583 19.2% 309 30.2% 3.6%
70–79 3,918 8.8% 312 30.5% 8.0%
≥80 1,408 3.2% 208 20.3% 14.8%
Total 44,672 100.0% 1,023 100.0% 2.3%
Source: Natixis PRCG, Chinese Center for Disease Control and Prevention.
FOR FINANCIAL PROFESSIONALS ONLYChinese Economic Supportive Measures
• Government measures announced thus far appear to be targeted towards easing employment pressures and assisting companies with short term
funding concerns.
• PBoC plans to lower the targeted RRR for qualified institutions.
• In an attempt to help SMEs, the PBoC raised the refinancing quota by CNY500bln for industries related to farming, livestock, travel, and transportation.
• Shanghai announced that it will provide subsidies for cinemas and movie distribution companies.
• Shandong allocated CNY12.7bln to aid transportation projects, targeting roads and railways.
• NDRC reiterated that the 2020 economic and social targets could still be achieved and that the central government will continue to roll out fiscal support.
• PBoC mentioned that they plan to accelerate the implementation of CNY300bln in refinancing loans, adjust the targeted RRR cuts for specific financing, and
support manufacturing, exports and supply chains through 3 policy banks.
• MoF stated that central and regional governments will start a CNY100bln COVID-19 prevention fund.
• Anhui province rolled out 17 measures to support agriculture companies, including work resumption acceleration and credit support.
• Henan province rolled out 18 measures to support the real estate industry, including temporary credit expansion and a delayed or cut in fee collection.
• State Taxation Administration announced that it would temporarily waive the social security collection for companies based on regional financing conditions.
Specifically, SMEs and big companies would be waived by no more than 5 and 3 months respectively.
• Hebei province announced a CNY50bln fund to support work resumption, COVID 19 prevention and infrastructure spending.
• PBoC cut the LPR rate by 10bps to 4.05% for 1year loans and 5bps to 4.75% for 5 year loans.
• ICBC raised the credit loan limit to CNY100mln and lending discounts to epidemic prevention SMEs and Hubei SMEs.
Source: Natixis PRCG. SOE are State Owned Enterprises. SMEs are Small and Medium Enterprises. RRR is the required reserve ratio for banks.
FOR FINANCIAL PROFESSIONALS ONLYOther Economic Supportive Measures
• Hong Kong
• Government announced fiscal stimulus measures totaling $15.4B including $1,284 cash payments to all 10,000 adult permanent residents and a salary tax cut for 2 million
workers
• Singapore
• Government announced 2020 budget with widest deficit since 1997 as the government pledged $570M to counter the virus outbreak and an additional $4B to support
businesses and consumers and delay the increase of a goods and services tax
• South Korea
• Bank of Korea left policy rate unchanged but announced an increase in the cap for cheap loans available to companies affected by the virus outbreak and left door open to
future rate cuts
• Finance Minister announced government would spend $13.2B in support to businesses and individuals with plans to approve an additional $5B in aid
• G7
• Released joint communique following teleconference between G7 finance ministers and central bank governors affirming the group’s commitment to use all appropriate
policy tools to achieve strong, sustainable growth and safeguard against downside risks though no specific measures were announced
• EU
• European Union expected to grant waivers under EU fiscal flexibility clauses rules to allow increased spending by countries impacted by the virus
• Rumors of possible joint fiscal response among member finance ministers
• Italy
• Italy announced $4B stimulus package to help cope with the outbreak including tax and mortgage payment delays as well as broader yet-to-be unveiled measures
• Germany
• German Finance Minister Olaf Scholz considering a temporary suspension of constitutional debt limits though measure is likely to be contentious in Parliament
• Australia
• Reserve Bank of Australia announced 25 basis point cut citing virus outbreak as having significant effect on Australian economy, particularly within education and travel
• United States
• Fed announced emergency intra-meeting rate cut of 50 basis points after unanimous vote recognizing the evolving risks the epidemic posts to economic activity
Source: Natixis PRCG.
FOR FINANCIAL PROFESSIONALS ONLYDisclosure
This presentation is provided for informational purposes only and should not be construed as investment advice. References to specific securities or industries
should not be considered a recommendation. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and
do not necessarily reflect the views of Natixis Investment Managers, or any of its affiliates. There can be no assurance that developments will transpire as
forecasted and actual results will be different. Data and analysis does not represent the actual or expected future performance of any investment product. We
believe the information, including that obtained from outside sources, to be correct, but we cannot guarantee its accuracy. The information is subject to change at
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This presentation contains “forward-looking statements" concerning activities, events or developments that the Portfolio Research and Consulting Group (PRCG)
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