Ex-FDA Chief Brushes Off Some Coronavirus Concerns As Investors Brace For Impact

Former FDA Commissioner Scott Gottlieb said Tuesday afternoon on CNBC the coronavirus "so far seems to be a mild illness."

Benzinga · 01/22/2020 17:44

Former FDA Commissioner Scott Gottlieb said Tuesday afternoon on CNBC the coronavirus "so far seems to be a mild illness."

The total reported cases rose to 440 in China with nine confirmed fatalities, at time of publication Wednesday afternoon.

Gottlieb: Not That Serious

The current coronavirus has about a 70% overlap with SARS and the illness associated with the coronavirus isn't as significant, Gottlieb said on Tuesday. As such, there are likely a lot of mild or moderate cases of infection which implies the 300 cases of infection which has been reported so far is not an accurate number.

However, the coronavirus appears to be spreading more rapidly and may have already achieved sustained human-to-human transmission. The U.S. government and relevant parties likely have the necessary tools to conduct an effective screening process.

All indications suggest the coronavirus outbreak "isn't necessarily that serious" for people who aren't young or old, he said. In fact, people get sick from some strain of a coronavirus "all the time."

Sector Rotation Towards Med Stocks

If the coronavirus continues to spread investors may look to move away from hospitality and travel stocks and into companies who manufacture medical devices, Taurus Wealth Advisors' Rainer Michael Preiss said Wednesday on CNBC's "Street Signs Asia." This trend started playing out over the past few days and could play out "longer than people think."

The timing of the outbreak comes at a time of "peak optimism" in the markets and could not rebound until "peak pessimism" passes, he said.

"Anybody who thinks this will be a quick fix most probably needs to realize these things take time and also they are very complicated and deep issues," he said.

Cramer: Buy Unrelated Stocks

So far the coronavirus looks to be less lethal than the SARS virus but will likely have a visible impact on companies with a strong presence in China, particularly travel, tourism and gaming companies, Jim Cramer said Tuesday on "Mad Money." But if unrelated stocks start to sell off, investors should take advantage and buy high-quality stocks on any weakness.

"It's collateral damage where there shouldn't be damage," Cramer said.

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