Month: February 2020

While the world will be focusing on every development out of China which is struggling to contain the fallout from the coronavirus pandemic which has now infected nearly 17,500 people across the globe, in terms of newsflow DB’s Jim Reid writes that this week the highlight could be today’s first US democratic primary in Iowa – the first of four this month. There’ll also be a number of data releases, including PMIs from around the world (today and Wednesday), before the US jobs report comes out on Friday, now without a lockup and forcing traders and analysts to scramble to decipher what the BLS has reproted. Earnings season will also continue to be in full flow.

While Iowa only makes up about 1% of nationwide delegates, we will start to see some sign as to momentum of the various candidates. Technically there will also be Republican primaries, but these are widely considered a foregone conclusion in favor of President Trump. In terms of what to expect, the national polling average from RealClearPolitics shows former Vice President Joe Biden still in the lead at the moment, with 27.2%, followed by Senator Bernie Sanders on 23.5% and Senator Elizabeth Warren on 15.0%.

However, in Iowa, the polling average shows Sanders in the lead, with 24.7%, and Biden in second on 21.0%. Furthermore, both former Mayor Pete Buttigieg (16.3%) and Warren (15.2%) are around the crucial 15% mark that is important when it comes to accumulating the delegates required to win the nomination.

In terms of what will happen, the race remains competitive, with FiveThirtyEight’s model at time of writing giving Sanders a 40% chance of winning the most votes in Iowa, followed by Biden on 34%, with Buttigieg on 18% and Warren on a 16% chance. It’s true that often the winner of the Iowa caucuses don’t actually go on to be the nominee – indeed on the Republican side the winners in 2008, 2012 and 2016 all lost out to someone else. Nevertheless, it’s the first indicator of real votes we have, and very important in terms of momentum for each of the candidates, as it’s only 8 days later that the next primary takes place in New Hampshire, and between the two votes there’ll be another TV debate between the candidates on the Friday.

The week ahead also has a number of data highlights, with the main ones likely to be the release of manufacturing (today), services and composite (Wednesday) PMIs from around the world. We have already had the preliminary PMIs from a number of countries, so those countries such as Italy where we haven’t had the preliminary numbers will take on added interest. Also of note will be the ISM manufacturing and nonmanufacturing indices from the US, out today and Wednesday respectively. Back in December, the ISM manufacturing reading fell to 47.2, its lowest level since June 2009, though the consensus is expecting an uptick for January to 48.4, so that’s one to keep an eye out for.

On Friday, we’ll also get the US jobs report for January, the first one that will be subject to the new lockup rules meaning it is unclear if wire services will have any prepared data at the time the report comes out. The current consensus expectation is for a +160k increase in nonfarm payrolls in January, up from the +145k increase in December, with the unemployment rate remaining at 3.5%, and average hourly earnings growth ticking up a tenth to +3.0% year-on-year. Other key data out this week will come with the Euro Area’s retail sales for December on Wednesday, while in Germany, there’ll be the release of December’s factory orders on Thursday and industrial production on Friday.

Also earnings season continues this week, with another raft of companies reporting. Looking at things so far, of the 225 S&P 500 companies that have reported, 74.4% have reported a positive surprise on earnings and 64.1% have reported a positive surprise on sales. Looking to the week ahead, today sees Alphabet report. Then tomorrow we’ll hear from Walt Disney, BP and Sony. On Wednesday, there’s Merck, Novo Nordisk, GlaxoSmithKline, Siemens, Qualcomm, BNP Paribas and General Motors. Thursday sees reports from L’Oréal, Bristol-Myers Squibb, Philip Morris International, Total, Sanofi, Enel, Nordea Bank, UniCredit, Société Générale, Twitter and Toyota. And finally on Friday, we’ll hear from AbbVie.

Finally on US politics, tomorrow sees President Trump give his State of the Union address to Congress.

Below is a day by day summary of key events, courtesy of Deutsche Bank:

Monday

• Data: January Manufacturing PMIs from Indonesia, South Korea, Japan, China, India, Russia, turkey, Italy, France, Germany, South Africa, Euro Area, UK, Brazil, Canada and US, China December industrial profits, Japan January vehicle sales, US December construction spending, January ISM manufacturing
• Central Banks: Fed’s Bostic speaks
• Earnings: Alphabet
• Politics: Iowa caucuses held in the US

Tuesday

• Data: UK January construction PMI, Euro Area December PPI, Italy preliminary January CPI, US December factory orders, final December durable goods orders, non-military capital goods orders excluding aircraft
• Central Banks: Reserve Bank of Australia decision
• Earnings: Walt Disney, BP, Sony
• Politics: President Trump delivers State of the Union address to Congress

Wednesday

• Data: January services and composite PMIs from Japan, China, India, Russia, Italy, France, Germany, Euro Area, UK, Brazil and US, Euro Area December retail sales, US weekly MBA mortgage applications, January ADP employment change, ISM non-manufacturing index, December trade balance, Canada December international merchandise trade
• Central Banks: Brazil central bank decision, BoJ’s Wakatabe, ECB’s de Guindos, Bank of Canada’s Wilkins and Fed’s Brainard speak
• Earnings: Merck, Novo Nordisk, GlaxoSmithKline, Siemens, Qualcomm, BNP Paribas, General Motors

Thursday

• Data: Germany December factory orders, January construction PMI, US preliminary Q4 unit labour costs, nonfarm productivity, weekly initial jobless claims, Japan December labour cash earnings, household spending
• Central Banks: Reserve Bank of India decision, ECB publishes Economic Bulletin, BoJ’s Masai, ECB’s Lagarde and Villeroy and Fed’s Kaplan speak
• Earnings: L’Oréal, Bristol-Myers Squibb, Philip Morris International, Total, Sanofi, Enel, Nordea Bank, UniCredit, Société Générale, Twitter, Toyota

Friday

• Data: China January trade balance, Japan preliminary December leading index, Germany December trade balance, industrial production, France December industrial production, manufacturing production, trade balance, Italy December retail sales, US January change in nonfarm payrolls, unemployment rate, labour force participation rate, average hourly earnings, final December wholesale inventories, December consumer credit, Canada January net change in employment, unemployment rate, participation rate
• Central Banks: Russian monetary policy decision, Fed’s Quarles speaks (00:15 UK time), Fed releases semi-annual monetary policy report to Congress
• Earnings: AbbVie
• Politics: US Democratic primary TV debate

Finally, focusing on just the US, Goldman writes that the key economic data releases this week are the ISM manufacturing index on Monday, the ISM non-manufacturing index on Wednesday, and the employment report on Friday. There are a few speaking engagements from Fed officials this week.

Monday, February 3

• 10:00 AM ISM manufacturing index, January (GS 48.3, consensus 48.5, last 47.2): Our manufacturing survey tracker rose by 2.1pt to 52.5 in December, following firmer regional manufacturing surveys on net. However, we note that late-month surveys like the ISM could be affected by the outbreak of the coronavirus. Additionally, we do not expect improvement among firms exposed to the commercial aircraft supply chain, as Boeing halted production of the 737 MAX in the month. Taken together, we expect the ISM manufacturing index to rise 0.5pt to 48.3 (from its upward revised level of 47.8).
• 10:00 AM Construction spending, December (GS +0.7%, consensus +0.5%, last +0.6%): We estimate a 0.7% increase in construction spending in December, with scope for increases in both private and public construction spending.
• 02:00 PM Senior Loan Officer Opinion Survey (Q4) likely released
• 04:00 PM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Fed President Raphael Bostic will speak on big data and machine learning at a conference in California. Audience Q&A is expected.
• 5:00 PM Lightweight motor vehicle sales, January (GS 16.7m, consensus 16.8m, last 16.7m)

Tuesday, February 4

• 10:00 AM Factory Orders, December (GS +1.5%, consensus +1.2%, last -0.7%); Durable goods orders, December final (last +2.4%); Durable goods orders ex-transportation, December final (last -0.1%); Core capital goods orders, December final (last -0.9%); Core capital goods shipments, December final (last -0.4%): We estimate factory orders increased 1.5% in December following a 0.7% decline in November. Durable goods orders rose in the December advance report, driven by a large increase in defense orders.

Wednesday, February 5

• 08:15 AM ADP employment report, January (GS +175k, consensus +158k, last +202k): We expect a 175k gain in ADP payroll employment, reflecting the impact of lower jobless claims and other ADP model inputs. While we believe the ADP employment report holds limited value for forecasting the BLS nonfarm payrolls report, we find that large ADP surprises vs. consensus forecasts are directionally correlated with nonfarm payroll surprises.
• 08:30 AM Trade balance, December (GS -$48.1bn, consensus -$47.8bn, last -$43.1bn): We estimate the trade deficit increased by $5.0bn in December, reflecting a rebound in the goods trade deficit.
• 10:00 AM ISM non-manufacturing index, January (GS 54.9, consensus 55.1, last 54.9): Our non-manufacturing survey tracker edged down by 0.1pt to 54.1 in January, following mixed regional service sector surveys. We expect the ISM non-manufacturing index to remain unchanged at 54.9 in the January report.
• 04:10 PM Fed Governor Brainard (FOMC voter) speaks: Federal Reserve Governor Lael Brainard will speak on payment system innovation.

Thursday, February 6

• 8:30 AM Nonfarm productivity (qoq saar), Q4 preliminary (GS +1.6%, consensus +1.5%, last -0.2%); Unit labor costs, Q4 preliminary (GS +1.6%, consensus +1.2%, last +2.5%): We estimate non-farm productivity growth rebounded to +1.6% in Q4 qoq saar (+1.8% yoy), above the trend achieved during this expansion. This reflects steady business output growth in Q4 and only a modest increase in hours worked. We expect Q4 unit labor costs—compensation per hour divided by output per hour—to decelerate to +1.6% qoq ar (+2.5% yoy).
• 08:30 AM Initial jobless claims, week ended February 1 (GS 215k, consensus 215k, last 216k); Continuing jobless claims, week ended January 25 (consensus 1,710k, last 1,703k): We estimate jobless claims ticked down 1k to 215k in the week that ended February 1. We expect a persistent winter seasonal bias to continue to exert upward pressure on the continuing claims measure through February.
• 09:15 AM Dallas Fed President Kaplan (FOMC voter) speaks: Dallas Fed President Robert Kaplan will speak on the economic outlook at an event in Dallas.
• 07:15 PM Fed Vice Chair for Supervision Quarles (FOMC voter) speaks: Federal Reserve Vice Chair for Supervision Randal Quarles will give a speech on the economic and monetary policy outlook.

Friday, February 7

• 08:30 AM Nonfarm payroll employment, January (GS +190k, consensus +160k, last +145k); Private payroll employment, January (GS +185k, consensus +150k, last +139k); Average hourly earnings (mom), January (GS +0.2%, consensus +0.3%, last +0.2%); Average hourly earnings (yoy), January (GS +3.0%, consensus +3.1%, last +3.1%); Unemployment rate, January (GS 3.5%, consensus 3.5%, last 3.5%): We estimate nonfarm payrolls increased 190k in January. While employment surveys on net were little changed in the month, initial jobless claims declined further, and an unseasonably dry survey week in the Northeast and Ohio Valley is set to boost weather-sensitive categories. We also note that January job growth tends to accelerate in tight labor markets, as labor supply constraints may lead firms to implement fewer end-of-year layoffs. We do not expect a significant impact from Census employment in this week’s report. We estimate an unchanged unemployment rate at 3.5%, as we believe the increase in continuing claims over the last two months reflects technical distortions related to residual seasonality—and in any event, the uptrend tentatively retraced in the first three weeks of 2020. We estimate average hourly earnings increased 0.2% month-over-month and 3.0% year-over-year, reflecting neutral calendar effects and continued upward wage pressures.
• 11:00 AM Federal Reserve Board Releases Monetary Policy Report to Congress

Source: Deutsche Bank, Goldman

Last week, scientists in Hong Kong warned that it might take up to a year for them to produce and test a vaccine to fight the deadly coronavirus that has now killed more people than SARS in mainland China. But on Monday, shares of drug company Gilead climbed following reports that it’s conducting a human trial for a drug to fight the outbreak, according to Bloomberg.

Gilead shares have already faded their gains…

…but we suspect that news about the trials is contributing to the forgiving market sentiment in the US, where shares look set to open higher following the bloodbath overnight in Chinese markets.

Here’s more from the Bloomberg report about the clinical trials, which will reportedly be carried out in Wuhan, the epicenter of the viral outbreak. As many as 270 infected patients will be recruited for the study.

Remdesivir, a new antiviral drug by Gilead Sciences Inc. aimed at infectious diseases such Ebola and SARS, will be tested by a medical team from Beijing-based China-Japan Friendship Hospital for efficacy in treating the deadly new strain of coronavirus, a hospital spokeswoman told Bloomberg News Monday.

Trial for the drug will be conducted in the central Chinese city of Wuhan — ground zero of the viral outbreak that has so far killed more than 360 people, sickened over 17,000 in China and spread to more than a dozen nations. As many as 270 patients with mild and moderate pneumonia caused by the virus will be recruited in a randomized, double-blinded and placebo-controlled study, Chinese news outlet The Paper reported on Sunday.

China has kick-started a clinical trial to speedily test a drug for the novel coronavirus infection as the nation rushes therapies for those afflicted and scours for vaccines to protect the rest.

The task of finding a workable vaccine has taken on added urgency now that the outbreak is set to cost the global economy up to 4x what SARS did during the 2002-2003 outbreak, which is why so many companies are racing to develop the vaccine. JNJ is also working on a coronavirus vaccine.

Drugmakers such as GlaxoSmithKline Plc. as well as Chinese authorities are racing to crash develop vaccines and therapies to combat the new virus that’s more contagious than SARS and could cost the global economy four times more than the $40 billion sapped by the 2003 SARS outbreak. The decision to hold human trials for remdesivir shows it’s among the most promising therapies against the virus that so far has no specific treatments or vaccines.

Gilead’s experimental drug hasn’t been approved by any regulators, but it’s being tested on the front lines of the outbreak in the absence of any approved remedies.

All of this begs the question: is ‘we found a workable vaccine’ the new ‘trade deal secured’? Will confirmation be enough to send US stocks to fresh record highs?

Half of China’s economy – the second largest in the world – is expected to be offline through at least mid-February. Traders started pricing in the impact on oil demand weeks ago. And now that it’s become clear to everybody that this problem isn’t going away any time soon, and after oil prices recorded their largest monthly drop in 30 years, OPEC might step in to ‘re-balance’ the global energy market.

Confirming earlier whispers, Saudi Arabia is reportedly pushing for a major, short-term oil production cut, WSJ reported Monday morning, citing anonymous OPEC officials.

A group of OPEC countries and their allies – collectively known as OPEC+ – are planning to meet Tuesday and Wednesday to debate possible action thanks to the outbreak in China, the world’s largest oil importer and consumer.

One scenario being discussed is that Saudi Arabia, OPEC’s kingpin, would lead a collective reduction of 500,000 barrels a day. The production cut will remain in place until the outbreak has subsided, cartel officials said.

Another, more drastic, option being considered would involve a temporary cut of 1 million b/d, a cut that would deliver a decisive ‘jolt’ to the market (and potentially trigger another flurry of angry Trump tweets about oil prices – the ‘invisible tax’ – being too high.

According to WSJ, the cartel is still split on what to do. Plans to schedule a full meeting of the cartel and its Russia-led allies were scrapped in favor of a smaller meeting to discuss the impact of the virus outbreak on global demand.

OPEC and its allies are split over how to manage oil supply in the face of the deadly coronavirus, which has already eroded demand in China. Collective responses by oil producers tend to be more efficient in supporting crude prices, which have lost 15% in the past month.

Despite the Saudi prodding, the cartel and 10 allied nations led by Russia stopped short of scheduling an emergency meeting of its full delegation this week and will instead hold a technical meeting to access the virus’s impact and make recommendations to members.

Producers would then decide if they hold a small gathering led by Saudi Arabia and Russia – called a Joint Ministerial Monitoring Committee – or a summit of all 23 producers in Vienna, the officials said.

Oil prices ticked higher on the report. If the cuts are confirmed, we suspect the rebound will be even more pronounced.

Authored by Lance Roberts via RealInvestmentAdvice.com,

In late 1999, it was stated that “investing like Warren Buffett was the same as driving ‘Dad’s ole’ Pontiac.” The suggestion, of course, was that “value” investing was no longer a viable investment strategy in the new “dot.com” economy where “growth” was all that mattered. After all, in the “new world,” it was indeed “different this time.” 

Less than a year later, investors wished they had adhered to Warren Buffett’s strategy of buying value as the “Dot.com dream” emerged as a nightmare for many unwitting individuals.

However, it wasn’t just stocks either. In 2007, individuals were chasing the “momentum” in the real estate market as individuals left their jobs to pursue riches in housing and were willing to “pay any price” under the assumption they would be able to sell higher. Of course, it was long after then Fed Chairman Ben Bernanke uttered the words “the subprime market is contained,” the dreams of riches evaporated like a “morning mist.” 

As Warren Buffett once quipped, “price is what you pay, value is what you get.”  

Throughout market history, investors have repeatedly abandoned this simple principle during periods where bull market advances seemed to defy logic. Ultimately, those investors paid a dear price for their speculation as the reality of “overpaying for value” led to poor financial outcomes.

As we have noted in a series of articles posted at RIAPRO.net, we believe the market is on the precipice of another monumental shift from “growth” to “value,” and as repeatedly seen in the past will blindside most investors.

Value vs. Growth

The market’s surge higher since the financial crisis, which has been driven by massive fiscal and monetary policies, have been nothing short of extraordinary. Currently, the S&P 500 is trading at the greatest deviation from its long-term exponential growth trend in history.

This is occurring at a time where market prices are advancing while corporate profitability has been flat since 2014.

While we have previously discussed the unparalleled use of monetary policy to push markets higher, massive fiscal spending designed to keep economic growth positive, and how corporations have shunned future growth with a preference for the short-term incentive of “share repurchases.”

As Michael Lebowitz, CFA previously noted:

“As a result of these behaviors and actions, we have witnessed an anomaly in what has historically spelled success for investors. Stronger companies with predictable income generation and solid balance sheets have grossly underperformed companies with unreliable earnings and over-burdened balance sheets. The prospect of majestic future growth has trumped dependable growth. Companies with little to no income and massive debts have been the winners.”

This was much the same as we saw in late 1999 as companies with no earnings, no revenue, and no real strategy for growth exploded higher in a speculation fueled buying frenzy.

This underperformance of “value” relative to “growth” is not unique. What is unique is the current duration and magnitude of that underperformance. To say unprecedented is almost an understatement.

The graph below charts ten-year annualized total returns (dividends included) for value stocks versus growth stocks. The most recent data point representing 2018, covering the years 2009 through 2018, stands at negative 2.86%. This indicates value stocks have underperformed growth stocks by 2.86% on average in each of the last ten years.

The data for this analysis comes from Kenneth French and Dartmouth University.

There are two important takeaways from the graph above:

• Over the last 90 years, value stocks have outperformed growth stocks by an average of 4.44% per year (orange dotted line).

• There have only been eight ten-year periods over the last 90 years (total of 90 ten-year periods) when value stocks underperformed growth stocks. Two of these occurred during the Great Depression and one spanned the 1990s leading into the Tech bust of 2001. The other five are recent, representing the years 2014 through 2018.

It is important to understand that it is “investor speculation” which drives these deviations in returns between growth and value. Of course, when things ultimately go “pear-shaped,” the return to value tends to be a swift event. The chart below overlays important periods in market history where “value” became “valued.”

The chart below shows the difference in the performance of the “value vs growth” index versus a pure growth index. Both are based on a $100 investment. While value investing will always provide consistent returns, there are times when growth outperforms value and vice versa. What is important to note are the periods when “value investing” has the greatest outperformance as noted by the “blue shaded” areas.

Given that we are statistically, and logically, very likely nearing the end of the current cycle, it is even more crucial to grasp what decades of investment experience tells us about the future.

When the cycle turns, we have little doubt the value-growth relationship will revert back to its long-term mean. Importantly, seldom do such reversions stop at the mean.

“To better understand why this is so important, consider what happens if the investment cycle turns and the relationship of value versus growth returns to the average over the next two years. In such a case, value would outperform growth by nearly 30% in just two years. Anything beyond the average would increase the outperformance even more.” – Michael Lebowitz

History Doesn’t Repeat

It is often noted that history doesn’t repeat, but it often rhymes, particularly when it comes to financial markets. It is not a question of if the rotation to value will occur, it is only a function of when.

However, this is the risk that investors take on currently in the market. Chasing markets is the purest form of speculation. Ultimately, it is a pure bet on prices going higher rather than determining if the price being paid for those assets are selling at a discount to fair value.

Benjamin Graham, along with David Dodd, attempted a precise definition of investing and speculation in their seminal work Security Analysis (1934).

“An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.”

There is also a very important passage in Graham’s The Intelligent Investor:

“The distinction between investment and speculation in common stocks has always been a useful one, and its disappearance is a cause for concern. We have often said that Wall Street as an institution would be well advised to reinstate this distinction and to emphasize it in all its dealings with the public. Otherwise, the stock exchanges may someday be blamed for heavy speculative losses, which those who suffered them had not been properly warned against.”

While the current market advance seems to be unstoppable, this was the attitude seen by investors at every prior market in history. As Howard Marks once stated:

“Rule No. 1: Most things will prove to be cyclical.

Rule No. 2: Some of the greatest opportunities for gain and loss come when other people forget Rule No. 1.”

The realization that nothing lasts forever is critically important to long term investing. To “buy low,” one must have first “sold high.” Understanding that all things are cyclical suggests that after long price increases, investments become more prone to declines than further advances.

The rotation from “growth” to “value” is inevitable. It will occur against a backdrop of devastation for the majority of investors quietly lulled into the extreme sense of complacency years of monetary interventions have provided.

The only question is whether you will be the buyer of “value” at a time when everyone else is selling “growth?”

It appears that around the time we suggested someone reach out to the Wuhan Institute of Virology to get some answers about the origin of the deadly Coronavirus epidemic (which Twitter decided was sufficient to get us barred from the platform), India was doing just that.

ACcording to The Hindu and GreatGameIndia, after Indian scientists were forced to withdraw their study concluding Coronavirus was injected with HIV AIDS virus amidst massive online criticism from Social Media experts, now Indian authorities have launched an investigation against China’s Wuhan Institute of Virology.

The Indian government has ordered an inquiry into a study conducted in the Northeastern state of Nagaland (close to China) by researchers from the U.S., China and India on bats and humans carrying antibodies to deadly viruses like Ebola, officials confirmed to The Hindu.

The study came under the scanner as two of the 12 researchers belonged to the Wuhan Institute of Virology’s Department of Emerging Infectious Diseases, and it was funded by the United States Department of Defense’s Defense Threat Reduction Agency (DTRA). They would have required special permissions as foreign entities.

The study, conducted by scientists of the Tata Institute of Fundamental Research, the National Centre for Biological Sciences (NCBS), the Wuhan Institute of Virology, the Uniformed Services University of the Health Sciences in the U.S. and the Duke-National University in Singapore, is now being investigated for how the scientists were allowed to access live samples of bats and bat hunters (humans) without due permissions.

The results of the study were published in October last year in the PLOS Neglected Tropical Diseases journal, originally established by the Bill and Melinda Gates Foundation.

Bill Gates, the man who tops the Forbes richest person in the world list had issued a grave warning about a potential Coronavirus-like catastrophe that could kill 30 million people at the Munich Security Conference held in Germany in 2017:

“Whether it occurs by a quirk of nature or at the hand of a terrorist, epidemiologists say a fast-moving airborne pathogen could kill more than 30 million people in less than a year. And they say there is a reasonable probability the world will experience such an outbreak in the next 10 to 15 years.”

“The Indian Council of Medical Research (ICMR) sent a five-member committee to investigate. The inquiry is complete, and a report has been submitted to the Health Ministry,” a senior government official told The Hindu.

The U.S. Embassy and the Union Health Ministry declined to comment on the inquiry. In a written reply to questions from The Hindu, the U.S. Centre for Disease Control (CDC) in Atlanta said it “did not commission this study and had not received any enquiries [from the Indian government] on it.” An American official, however, suggested that the U.S. Department of Defense might not have coordinated the study through the CDC.

The study, ‘Filovirus-reactive antibodies in humans and bats in Northeast India imply Zoonotic spillover’, published in PLOS Neglected Tropical Diseases states the researchers found “the presence of filovirus (e.g. ebolavirus, marburgvirus and dianlovirus) reactive antibodies in both human (e.g. bat hunters) and bat populations in Northeast India, a region with no historical record of Ebola virus disease.”

It adds: “Ebola has posed a global health threat several times, most notably from 2013 to 2016. It is a deadly disease, with a fatality rate of roughly 50 percent.” Now, according to health officials, 2019-nCoV, too, has acquired the ability to pass between people and can do so before symptoms appear.

The Nagaland study suggests bats in South Asia act as a reservoir host of a diverse range of filoviruses, and filovirus spillover occurs through human exposure to these bats. For the study done in 2017, 85 individuals participating in an annual bat harvest at Mimi, Nagaland, were picked. The majority of bat hunters were male, aged between 18 and 50, and participated at least eleven times in the harvest. The study says the potential virus present in the bats may not be an exact copy of the virus responsible for various outbreaks.

Given the widespread challenges from the newly discovered viruses, officials say they want to take no chance on their spread and will take action to ensure all medical studies in the country adhere to strict norms.

Indian military believes that the U.S. Center for Disease Control in Atlanta was involved in the 1994 plague in the Indian city of Surat which killed 52 people and close to a quarter of the city’s citizens fled the area for fear of being quarantined. Even the origin of 1994 plague is mired in controversy to this day.

R. Prasannan, the New Delhi Bureau Chief of The Week magazine, in his piece questioning whether Coronavirus was created in a lab wrote,

During the 1994 plague outbreak in Surat and Beed, it was found that the germs had an extra protein ring which could only have been inserted artificially. Indian scientists had raised concerns about a US biowar experiment having gone awry. THE WEEK had carried reports giving details of germ war reseach being carried on in labs under the Centre for Disease Control in Atlanta and about a newly developed germ detector being tested. The US embassy had denied the allegations. There were also reports that the Surat germ could have been developed in a lab in Almaty, Kazakhstan.

Mr. Prasannan is one of many experts from different fields who have raised doubts over the narrative being paddled by certain sections of the media. Among them is American Senator Tom Cotton who questioned mainstream media’s narrative on the origin of 2019 Wuhan Coronavirus, instead hinting that a biosafety laboratory in Wuhan working with the deadliest pathogens in the world could be the true source.

Even Dr. Francis Boyle who drafted the Biological Weapons Act in an explosive  interview said that the 2019 Wuhan Coronavirus is an offensive Biological Warfare Weapon and that the World Health Organization (WHO) already knows about it.