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Worries are growing that the economic impact from the novel coronavirus outbreak will be worse than expected and that markets are being too complacent in factoring it in as a risk.
What's happening: The number of confirmed cases has already far outpaced expectations and even those reports are being viewed through a lens of suspicion that the Chinese government is underreporting the figures.
Driving the news: Of the 364 companies that have held Q4 earnings calls, 138 cited the term “coronavirus” during the call, and about 25% of those included some impact from the coronavirus or modified guidance due to the virus, according to FactSet.
What they're saying: "This will eventually end badly. I have never in my career seen anything as crazy as what’s going on right now," Scott Minerd, global CIO of Guggenheim Investments, writes in a note. "The cognitive dissonance in the credit market is stunning."
He's not alone: "The ramp up in China will take much longer than many expect because of the need to prevent a secondary flare up in contagion," Diane Swonk, chief economist at Grant Thornton, said on Twitter.
State of play: "By most estimates, if the Chinese extend the lunar new year by two weeks it would not meaningfully impact the global supply chain, but if it went beyond two weeks then we would start to see problems for materials and consumer goods outside of China," Minerd argues.
Between the lines: It's been about two weeks and things don't look great.
Details: Minerd predicts that the "impact of all this on corporate profits and free cash flow will be dramatic," warning that China's first quarter GDP could fall as low as -6% annualized in the first quarter and oil could drop to $25 a barrel.
The bottom line: "We are either moving into a completely new paradigm, or the speculative energy in the market is incredibly out of control," Minerd says.
U.S. tariffs on Chinese imports "significantly dampened U.S. export growth" and cost American companies "$900 per worker overall and about $1,600 in the manufacturing sector." (Federal Reserve)
The U.S. is weighing new trade restrictions against China to cut off Huawei access to key semiconductor technology. (WSJ)
Multiple studies show that Uber and Lyft discouraged use of buses, subways and walking, and that the apps add to the overall amount of driving in the United States. (WSJ)
U.S. sales of print maps and road atlases have grown at a compound rate of 10% over the past five-year period. (USA Today)
U.S. industrial production fell by 0.3% in January, month over month, and the previous month was revised down to -0.4%.
Why it matters: "The drop in factory output is particularly concerning as over the past 50 years, we've only seen one instance where IP slowed this much YoY without a commensurate recession," BMO Capital Markets rate strategist Jon Hill said in a Friday note to clients.
The big picture: Some of the weakness can be blamed on Boeing, which has all but shut down as its 737 MAX jet has been grounded worldwide after two plane crashes killed hundreds in 2018 and 2019.
Illustration: Eniola Odetunde/Axios
Axios' Jennifer Kingson writes: Banks have been quietly rolling out biometrics to identify customers — verifying them by their fingerprint, voice or eye scan — and retailers like Amazon are getting into the game.
Why it matters: These companies are amassing giant databases of our most personal information — including our gait, how we hold our cellphones, our typing patterns — that raise knotty questions about data security and privacy.
The intrigue: Banks — and, increasingly, retailers — have been working in overdrive to use biometrics both in back-end systems (where consumers won't see them) and public-facing ones:
Banks say their systems are completely secure, but they are proceeding gingerly to avoid making their customers nervous. Several banks gave "no comments" to Axios when asked about their biometrics programs; Amazon did too.
There are already some horror stories:
What they're saying: "A biometric is a very sensitive piece of personal information. If your password gets stolen, you create a new password. If your fingerprints get stolen, you can't create new fingerprints," Stephen Ritter, CTO of Mitek, an identity verification company, tells Axios.
Reality check: Banking and credit card companies say biometrics — which, so far, are usually optional — are invaluable in fighting fraud and that spoofing is rare.
On the retail side: Amazon isn't the only company dabbling in biometrics.
Between the lines: What customers don't see is banks' and retailers' heavy use of "passive" or "behavioral biometrics" to thwart fraud.
Mexico's central bank cut interest rates to 7% last week, marking the 800th interest rate cut by a central bank since the Lehman Brothers' bankruptcy in September 2008, Bank of America Global Research notes.
What's happening: The number of rate cuts from central banks have picked up steam since last year when the global economy's growth rate stumbled to its slowest since the financial crisis.
Why it matters: The recent rate cuts are fueling "twin bubbles" in investment grade corporate bonds and Big Tech stocks like Facebook, Amazon and Netflix, BofA analysts say.
Watch this space: Allocation to equities fell to 60.3% of private clients' portfolios, which is still slightly above the historical average but well below the March 2015 peak of 62.5%.
Haile Selassie was the crown prince and later emperor of Ethiopia, who began his rule in 1930, was exiled during World War II after leading the resistance against the Italian invasion, and reinstated in 1941. A defining figure in the history of Ethiopia, he enacted myriad social, economic and educational reforms and made the country a charter member of the UN.