The blue chip index went into full retreat after health officials warned it was only a matter of time before the deadly virus becomes a public health threat in the United States. In separate briefings, officials from the Centers for Disease Control and Prevention, the National Institutes of Health and other agencies adopted a markedly different tone about the outbreak, emphasizing they no longer viewed its domestic spread in terms of “if” but rather “when.”

“We are finally starting to see the markets react to the coronavirus,” said Nicole Tanenbaum, chief investment strategist at Chequers Financial Management. “There has been a lot of complacency in the market and a sentiment-driven rally that hasn’t taken into account that this virus may not be as contained as we hoped it would be.”

Tuesday’s slide extended Monday’s dismal finish, which saw the Dow Jones industrial average shed more than 1,000 points in one of the steepest point losses in history. At the market close on Tuesday, the Dow stood at 27,081 after having flirted with 30,000 earlier this month. It has fallen 6.59% this week. The broad S&P closed at 3,128, down 3.03% on the day and down 6.28% over the last two days. The Nasdaq Composite finished the day down 2.77% at 8,965.

“Stocks are due for a bumpy ride as the market assesses the growing likelihood of a broad economic downturn,” said Ball State University economist Michael Hicks. “The economic fundamentals of recession in China and the increasing risk of Covid-19 clearly point to more losses. This is not just a few spooked investors.”

The Standard% Poor’s 500 and Nasdaq composites were down 3.2% and 2.9%, respectively, by mid-afternoon while the Dow had shed 3%.

Global markets also have trembled as the outbreak intensifies outside of China. Japan’s Nikkei index sank more than 3%. The Shanghai Composite Index was down roughly 0.6%, and Hong Kong’s Hang Seng was essentially flat. In Europe, Britain’s FTSE 100 fell 1.94% and Germany’s DAX closed the day 1.88%.

The price of oil was hit hard, with U.S. benchmark West Texas Intermediate dipping below $50.

“This is the make-or-break point trying to make a profit in the shale oil patch,” said John Kilduff of Again Capital.

Kilduff said the cratering of demand from China and South Korea “is a one-two punch to demand. You now have two out of three Asian economies throttling down the manufacturing and oil demand. It’s a major hit.”

Meanwhile the yield on the 10-year Treasury note, a key benchmark, fell to 1.32% during the day as investors fled to safety amid growing alarm the global economy is pulling back. Yields drop as the price of bonds rise.

“It’s fear,” said Michael DePalma, a managing director at MacKay Shields. “Treasuries are all about fear. And right now you are seeing fear that coronavirus infects more of the world, and the economic ripple effects are going to be severe. Investors are anticipating a global economic slowdown, so they are going to the safest, most liquid investment in the world. That’s U.S. Treasuries.”

Larry Kudlow, the president’s top economic adviser, said he thinks long-term investors should buy stock and expressed optimism the Chinese economy could rebound quickly.

“We have contained this. We have contained this. I won’t say airtight, but pretty close to airtight,” Kudlow told CNBC.

Kudlow also said he did not expect the Federal Reserve to react to the coronavirus and cut interest rates to juice the economy. He said there is “no supply disruption” yet appearing in the numbers being studied by the White House.

The pneumonia-like illness has spread rapidly since emerging in late December, with China confirming 77,658 cases and 2,663 deaths to date. Iran confirmed 95 cases and at least 15 deaths. And South Korea reported 144 new cases, bringing its toll to 977.

Shares of Moderna, the Massachusetts-based drugmaker, surged 25% Tuesday on reports that it had shipped the first batch of a coronavirus vaccine to U.S. government researchers.

According to the Wall Street Journal, Moderna had sent in vials to the National Institute of Allergy and Infectious Diseases in Bethesda, Maryland. The Institute told the Journal that it expects to start a clinical trial of 20 to 25 healthy volunteers by the end of April.

Much is still unknown about the novel coronavirus virus, prompting a rush to produce a vaccine and test its safety and efficacy. That push isn’t only coming from private biotech firms. Late Monday, the White House asked Congress for $1.8 billion in emergency spending to boost its coronavirus response.

“The administration believes additional federal resources are necessary to take steps to prepare for a potential worsening of the situation in the United States,” acting White House Office of Management and Budget director Russell Vought said in a letter to congressional leaders.

Separately, President Trump said Tuesday the U.S. stock market would crash if he doesn’t win reelection. Trump routinely cites the strength of the U.S. markets, which have long been trading at or near record highs, as a barometer of his presidency. From the White House to the campaign trail, he touts that success as one of his chief accomplishments.

Speaking at a business round table during his 36-hour visit to India, Trump said the markets would see a boost if he wins in November. But “if I don’t win, you’re going to see a crash like you’ve never seen before,” Trump said.

The fair is the leading industrial parts and business matching event in Asean, co-organised by the BOI’s Industrial Linkage Development Division, Infoma Markets, and the Thai Subcontracting Promotion Association. It will be held during May 13-16 at Bitec.

Total value of transactions is expected to be at least Bt16 billion, up from Bt14 billion last year.

Sonklin is confident of the success of the fair, despite the current coronavirus outbreak.

The S&P CoreLogic Case-Shiller index of property values increased 2.9% from the same month the previous year, data released Tuesday showed. That’s the biggest annual advance since January 2019 and matches the median forecast in a Bloomberg survey of economists. Prices were up 0.4% from November.

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Key insights

– Mortgage rates, already near three-year lows, could decline further in conjunction with the latest drop in U.S. Treasury yields. Cheaper financing costs will likely underpin demand in a market constrained by lean inventory, leading to further home-price appreciation.

– A separate gauge from the Federal Housing Finance Agency, which tracks repeat sales and derived from conforming loans, showed home prices climbed 0.6% in December from the previous month, the most since September, and were up 1.3% in the fourth quarter.

– Prices in all 20 cities increased in the year through December, led by Phoenix; Charlotte, North Carolina; and Tampa, Florida.

– National U.S. home prices increased 3.8% in December from a year earlier, the strongest annual advance since February.

The Standard & Poor’s 500 and Nasdaq composites both fell about 1.2%.

After such extreme sell-offs, stocks tend to bounce back quickly. But the market’s performance Tuesday morning appeared to tell a different story. American businesses are still wary that Chinese manufacturing and production will be stalled until the outbreak is under control. And the Federal Reserve is up against fresh pressure to find an emergency salve.

Meanwhile, Japan’s Nikkei index sank more than 3%. The Shanghai Composite Index was down roughly 0.6%, and Hong Kong’s Hang Seng was essentially flat.

In Europe, Britain’s FTSE sank 1.15% and Germany’s DAX was roughly 0.8% in the red.

The Chinese government confirmed 508 new cases, along with 74 deaths, bringing the total number of accumulated infections nationwide to 77,658, with 2,663 deaths. Iran confirmed 95 cases nationwide, with at least 15 deaths. And South Korea reported 144 new cases, bringing its national total to 977.

Shares of Moderna, the Massachusetts-based drugmaker, surged 10% Tuesday morning on reports that it had shipped the first batch of a coronavirus vaccine to U.S. government researchers. The share price had skyrocketed 15% in pre-market trading.

The Wall Street Journal reported Monday evening that Moderna had sent vials to the National Institute of Allergy and Infectious Diseases in Bethesda, Maryland. The Institute told the Journal that it expects to start a clinical trial of 20 to 25 healthy volunteers by the end of April to test whether two doses of the vaccine induce an immune response that can guard against the infection.

Much is still unknown about the novel coronavirus virus and the illness it causes, prompting a rush to produce a vaccine and test its safety and efficacy. That push isn’t only coming from private biotech firms. Late Monday, the White House asked Congress for $1.8 billion in emergency spending to boost its coronavirus response.

“The administration believes additional federal resources are necessary to take steps to prepare for a potential worsening of the situation in the United States,” wrote Acting White House Office of Management and Budget director Russell Vought in a letter to congressional leaders.

Separately, President Trump said Tuesday the U.S. stock market would crash if he doesn’t win reelection. Trump routinely cites the strength of the U.S. markets, which have long been trading at or near record highs, as a barometer of his presidency. From the White House to the campaign trail, he touts that success as one of his chief accomplishments.

Speaking at a business round table during his 36-hour visit to India, Trump said the markets would see a boost if he wins in November. But “if I don’t win, you’re going to see a crash like you’ve never seen before,” Trump said.

The government will waive taxes on hotels and restaurants in the nation’s top 10 tourist destinations for a three-month period starting March 1, Coordinating Minister for Economy Airlangga Hartarto told reporters in Jakarta after a cabinet meeting. State-run oil behemoth PT Pertamina will sell jet fuel at concessional rates to airlines to enable them offer a 30% discount on a quarter of their seats to these destinations, Finance Minister Sri Mulyani Indrawati said.

The fiscal incentives will be equivalent to $742 million (10.3 trillion rupiah), including about 3.3 trillion rupiah to be given as grants to local governments hit by the slump in tourist arrivals, Indrawati said. The stimulus for the tourism and related sectors may help draw more visitors and net the government 13 trillion rupiah in foreign exchange earnings, Tourism and Creative Economy Minister Wishnutama Kusubandio said.

The incentives will complement the central bank’s interest rate cut last week to support economic growth, Indrawati said, adding the banking regulator will also take steps to reduce cost of borrowing. The government will extend 1.5 trillion rupiah as interest rate and down-payment rebate for home buyers from the low-income groups, she said.

“All these measures are expected to support economic growth,” Indrawati said. The stimulus for housing will help clear the unsold inventory and have a multiplier impact on the economy, she said.

The coronavirus outbreak, which has killed nearly 3,000 people worldwide and is fast spreading outside China, is threatening to further weaken Indonesia’s already sputtering economy. Indrawati has called for a coordinated global response to the outbreak, warning that authorities may be underestimating its impact on trade and economic growth.

Indonesia hasn’t recorded any coronavirus cases, yet officials are worried about the broader impact the pandemic will have on the economy. The government had already announced plans to accelerate spending to protect household consumption which accounts for nearly 60% of the economy.

While Bank Indonesia last week trimmed its growth forecast for this year by 10 basis points to 5%-5.4%, the government had projected an expansion of 5.3% before the virus outbreak. The economy grew at 5.02% last year.

Below are the highlights of the fiscal stimulus:

– Interest rebate expected to generate demand for 175,000 new housing units this year

– 298.5 billion rupiah to be paid out as incentives for airlines, travel agents and social-media influencers to attract foreign tourists

– Tourist destinations eligible for tax breaks are – Batam, Yogyakarta, Makassar, Labuan Bajo, Lombok, Malang, Manado, Silangit, Tanjungpandan and Tanjungpinang

– Pertamina to give discount on jet fuel equivalent to 265 billion rupiah at nine airports

– Extra social security funds of 4.6 trillion rupiah for 15.2 million beneficiaries to boost consumption

– Government expects 736,000 additional foreign tourist arrivals with the stimulus

– 30% airfare discounts offered to 10 tourist destinations to cost 433.9 billion rupiah

Oxford Economics reckons an international health crisis could be enough to wipe more than $1 trillion from global gross domestic product. That would be the economic price tag for a spike in workplace absenteeism, lower productivity, sliding travel, disrupted supply chains and reduced trade and investment.

Investors are already nervous, with U.S. stock benchmarks slumping more than 3% on Monday and the S&P 500 Index dropping the most since February 2018.

For now, central bankers and governments continue to bet that the coronavirus will not damage the world economy by much, and perhaps allow it to enjoy a rapid rebound once the illness fades. But that confidence is being tested.

While the International Monetary Fund currently reckons the virus will only force it to knock 0.1 percentage point off its 3.3% global growth forecast for 2020, IMF Chief Economist Gita Gopinath said in a Yahoo Finance interview that a pandemic declaration would risk “really downside, dire scenarios.”

The head of the World Health Organization called the new cases “deeply concerning,” but said the outbreak isn’t yet a pandemic.

Still, the protracted shutdown of Chinese factories that were supposed to be back online and the spread of the virus to South Korea, Iran and Italy’s northern industrial heartland raise the specter of much greater death and disruption. The virus risks tipping Italy into a recession that could hurt the rest of Europe too.

South Korea’s economy is being buffered, with consumer confidence plunging the most in five years.

UBS Group AG Chairman Axel Weber is already far more pessimistic than the IMF and warned global growth will experience a massive drop from 3.5% to 0.5% and China will shrink in the first quarter.

“The much larger downside risk is that this continues to be a problem,” the former Bundesbank president told Bloomberg Television in Riyadh, where Group of 20 finance chiefs hinted at collective worries at the dangers of the virus.

How to assess the risk is complicated by doubt over how far the coronavirus will travel.

In an analysis that predates the current outbreak, the World Bank reckons a destructive pandemic could result in millions of deaths, and points to how even conservative estimates suggest such an experience might destroy as much as 1% of global GDP.

A disastrous health crisis akin to the 1918 Spanish flu, which may have killed as many as 50 million people, could cost 5% of global GDP, the Washington-based lender said in a 2015 report. A March 2016 paper co-authored by former U.S. Treasury Secretary Lawrence Summers likened the annual financial impact of a pandemic flu to the long-term yearly cost of global warming. It calculated that if pandemic deaths were to exceed 700,000 per year, the combined cost to the world economy of premature lives lost and illness, along with lost income, would total 0.7% of global income.

Oxford Economics’s tally of the impact from a global pandemic stemming from the current outbreak suggests a cost of $1.1 trillion to global GDP, with both the U.S. and euro zone economies suffering recessions in the first half of 2020. It describes such a scenario as a “short but very sharp shock on the world economy.”

Aside from containment of the disease, one mitigating factor — and a major unknown for economists modeling the outcome — will be the actions of central banks and governments to cushion the effects.

“When we entered the year we certainly didn’t think that central banks would be as eager to cut interest rates and to become even more supportive,” said Credit Suisse Group AG’s Nannette Hechler-Fayd’Herbe. “Now, the answer is going to be quite dependent on how the coronavirus spreading is going to continue.”

Yet for Drew Matus, chief market strategist at MetLife Investment Management, monetary policy alone would probably be insufficient.

“My guess would be you actually can’t solve it with interest rates,” he told Bloomberg Television. “People are worried about their families, worried about their health — 25 basis points doesn’t do it, in terms of encouraging people to go out there and spend.”

Association president Predee Daochai said today (February 25) that banks have already contacted their customers to offer them relief packages.

Among the measures for businesses in the tourism sector is the suspension of principle payment for a maximum one year, during which they need to pay only interest.

The packages for customers of auto loans include extension of repayment schedules and reduction of the monthly repayment amount.

Predee added that the association would closely monitor the situation until it returns to normal.

He said the decline in visitor numbers this year is due to concern over the coronavirus outbreak.

The fair is on from today until February 29 at Impact Muang Thong Thani convention centre.

He said the department made the right decision to go ahead and organise the fair, aiming to turn Thailand into the world’s jewellery hub.

He expects transactions worth Bt2.4 billion at the fair.

The country has targeted gems and jewellery exports growth of one per cent this year (excluding gold) worth Bt500 billion.

There are 972 local and foreign exhibitors at this year’s event.

The event has stepped up measures to deal with the outbreak to ensure visitor safety. For example, thermal scanners and thermal guns are deployed at the entrance. The venue will also frequently spray disinfectant at touch points, while face masks are available for visitors.

“ Private companies are collaborating to organise fairs, events and online promotions, aimed at stimulating travel and spending among Thais until the Songkran Festival” he added.

Thai AirAsia’s chief executive officer Santisuk Klongchaiya said the airline had launched a discount-code campaign on domestic routes during February 24 to 26 for flights scheduled to take off from February 24 to May 31.

Meanwhile, Vietjet and Thai Lion Air are running discount campaign for February.

“Tourism Authority of Thailand estimated that the country would lose over Bt250 billion in revenue if the Covid-19 scourge lasted for more than six months, and I agreed to its projection” said Chairat Trirattanajarasporn, president of Tourism Council of Thailand (TCT).

TCT expects 35 million in foreign arrivals this year , down from its previous target of 41.5 million.

Association of Thai Travel Agent (ATTA) President Vichit Prakobgosol said the number of Chinese tourists is expected to decrease from 11 million to 8 -9 million, due to the Covid-19 outbreak.

“However, it would reach 9 to 10 million if the government and private sector continued to run marketing campaigns throughout the year,” he added.

ATTA president also expected the Covid-19 situation to improve in the next two weeks, and China would be able to contain spread of the virus within April. “ China would allow its citizens to travel abroad in May and Thailand would be their first destinations ”.

Krungsri head of research and chief economist Somprawin Manprasert said the key factors that have affected the economy are the budget bill postponement, the Covid-19 outbreak and a severe drought.

The postponement forced the budget disbursement to begin in the middle or end of March and only Bt280 billion will be disbursed in fiscal year 2020, while the government expects to invest Bt430 billion of the budget, resulting in 0.1 per cent of GDP contraction.

The Covid-19 situation is quite unpredictable, Somprawin said. He believes the crisis will see improvement in May, but the effect on tourism will be dramatic as global incomes correspond to Chinese tourist spending, resulting in a 0.44 per cent loss for Thai GDP.

The severe drought has already cost the agriculture sector a Bt24-billion loss, and if the situation remains dire in June, damages will raise to Bt41 billion, leading to a GDP contraction of 0.3 per cent.

Somprawin expects the Monetary Policy Committee to cut the interest rate from 1 per cent to 0.75 per cent in its meeting on March 25, while financial measures may be launched to stimulate the economy. But if this fails, the economy will expand less than 1.5 per cent.

“We need to focus on consumer sentiments such as confidence in spending and investment,” Somprawin said. “Another concern is financial. If banks don’t want to extend loans and consumers don’t need them, the dynamics of the economy will be a slowdown.”

In the short term, the economy witnessed a -0.7 per cent drop in the first quarter, while for GDP it was -1.5 per cent compared to the fourth quarter of 2018. In the second quarter, economic expansion is expected to be 1.3 per cent compared to the first quarter, he said.

However, this prediction is based on the present coronavirus situation. If it becomes worse, the economy would be dragged down.