US CDC Warns of Need to Evacuate Due to Possible Local COVID-19 Transmission... US Stock Market Plunges Over 3% (Comprehensive)

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondents Baek Jong-min and Lee Hyun-woo] The U.S. Centers for Disease Control and Prevention (CDC) warned on the 25th (local time) about the possibility of community transmission of the novel coronavirus disease (COVID-19) within the United States. It also predicted that COVID-19 could spread worldwide as a pandemic. Following the CDC's warning about community transmission, fear of COVID-19 intensified, causing the New York stock market to plunge over 3% for two consecutive days, while the preference for safe assets strengthened, leading to another sharp rise in U.S. bond prices.

Nancy Messonnier, director of the CDC's National Center for Immunization and Respiratory Diseases, said at a press conference that "we will see community spread (of COVID-19 in the U.S.)" and that "it's just a matter of when it will happen." Messonnier emphasized that the outbreak of COVID-19 is "progressing and expanding very rapidly," and now is the time for businesses, schools, and hospitals to start preparing.

The CDC also warned of a global pandemic. Anne Schuchat, CDC deputy director, stated, "The current international outbreak situation of COVID-19 signals the potential for a worldwide pandemic." The CDC suggested that as COVID-19 spreads domestically, there could be significant disruptions to daily life, including cancellations of schools, sports events, concerts, and business schedules.

These remarks are interpreted as U.S. health authorities preparing for the possibility of community transmission of COVID-19. Alex Azar, U.S. Secretary of Health and Human Services (HHS), also expressed concern about shortages of masks needed in emergencies and urged measures to be taken. At Congress, he claimed, "There are 30 million 'N95' masks in stock to prevent inhalation of infectious particles, but 300 million are needed solely for healthcare workers in the event of community outbreaks of COVID-19." He also raised the need to prepare equipment such as oxygen respirators.

[Image source=Yonhap News]

As the CDC strongly urged countermeasures and fear of COVID-19 spread, the U.S. stock market continued to plunge over 3% for two consecutive days. On this day, the Dow Jones Industrial Average closed at 27,081.36, down 879.44 points (3.15%) from the previous day. The S&P 500 index fell 97.68 points (3.03%) to 3,128.21, and the Nasdaq index dropped 255.61 points (2.77%) to 8,965.61. The Dow and S&P 500 had also plunged 3.56% and 3.35%, respectively, the day before.

According to the U.S. economic media MarketWatch, it has been four years since June 2016 that the Dow Jones index fell more than 3% for two consecutive days. Particularly, airline-related stocks directly affected by the impact of COVID-19 continued to decline, with global aircraft manufacturer Boeing's stock down 4.36% and American Airlines down 9.16%.

As fear spread, the flow of funds into the safe asset bond market became more pronounced. The yield on long-term U.S. Treasury bonds continued to decline sharply. On this day, the 10-year U.S. Treasury yield fell to 1.31% intraday, dropping below the previous lowest record of 1.325% set in 2016. The 30-year yield also recorded 1.798%, marking an all-time low.

Larry Kudlow, director of the White House National Economic Council (NEC), described the CDC's warning as a kind of "emergency plan," saying, "It does not mean it will be implemented immediately." In an interview with CNBC, Kudlow said, "We are containing COVID-19 very firmly."