Sociopathic Tendencies.

“[It’s] a reminder to markets, which at every opportunity display a rather sociopathic tendency to want to be able to put this epidemic behind them”, said Marc Ostwald, chief economist and global strategist at ADM Investor Services in London.

I’m not sure “sociopathic” is the best way to describe markets’ approach to the coronavirus. What markets want is evidence that the spread of the deadly malady is abating, so we can rule out the worst-case outcome of an outright pandemic and focus more narrowly on the likely growth ramifications of the damage that’s already been done.

Hubei province’s revised method for tabulating infections led to a sharp jump in confirmed cases Thursday. China reported 15,152 additional cases, and 254 new deaths. Most the additions are attributable to the new counting method. The total number of fatalities on the mainland is now 1,367. There are currently more than 8,000 “severe” cases.

US equity futures slipped when the revised numbers were announced during early Asian trading and never recovered. European shares were lower too, although Asian equities help up ok, all things considered.

China dismissed the Communist Party secretary for Hubei, Jiang Chaoliang, and also removed Ma Guoqiang as party secretary of Wuhan.

“Hubei had previously only allowed infections to be confirmed by RNA tests, which can take days to process”, Reuters explains. “But it has begun using quicker CT scans, which reveal lung infections, to confirm virus cases and isolate them faster”.

“Previously, many patients with pneumonia-like symptoms found via CT scans could not be diagnosed as positive without an additional nucleic acid test”, Bloomberg wrote, before noting that it’s “unclear over which time period the number of cases in the new category were detected”.

Given that latter bit (i.e., about it being unclear over which time period the number of cases in the new methodology were detected), I strongly encourage readers to exercise common sense when assessing the following chart. All we have done is simply add a new bar based on the only information that is available to the public as of Thursday. The cases included in the right-most bar may well be evenly distributed across other days. For now, though, this is the best we can do:

The yen and gold reacted in predictable fashion. “The new diagnostic method in Hubei spooked risk sentiment, adding uncertainty to the overall development in the virus and confirming there had been underreporting in the province”, Danske Bank’s Kristoffer Kjaer Lomholt, said, from Copenhagen. “It is not clear if a similar under-reporting has taken place outside Hubei at this stage and will be at the forefront of market attention today”.

The good news is, this could mean that the virus is less deadly than originally thought. “The real mortality rate of the disease may be lower”, Dr Eyal Leshem of the Tel Aviv University School of Medicine, told Reuters.

Everyone with any sense knew the numbers were likely understated, so this may be viewed by markets as China simply owning up (or catching up) to reality. That’s the way Capital Economics is thinking about it, anyway. “For now, the latest figures don’t appear to undermine the recent tentative signs that the spread of the virus may be slowing”, they wrote.

Meanwhile, Japan found 44 new cases of the virus aboard the ill-fated Diamond Princess cruise ship, bringing the total to 218.

If you have additional questions about the new counting method for the virus, you can take your chances at the next media briefing in Beijing. But you probably won’t have much luck. “In a press conference Thursday afternoon, officials only took questions from state media, and no one asked about the data revisions”, Bloomberg says.