Coronavirus raises doubts about globalisation in some quarters, and about totalitarianism in others

Amid a sea of red, broker Liberum chooses to recommend Antofagasta (LON:ANTO) and Glencore (LON:GLEN) over other major mining companies like Rio Tinto (LON:RIO)(NYSE:RIO) and BHP (LON:BHP)(ASX:BHP).

Why is this?

The simple answer is that shares of Antofagasta and Glenore are likely to rebound faster when the current wave of panic selling abates, because the disruption to the copper price and copper-related supply chains will be much less severe than disruption in the iron ore market.

How much significance that distinction is likely to have in the long run is open to debate, however, as Liberum also reminds us that in 2019 global trade volumes contracted for the first time since the financial crisis.

Its possible to argue, therefore, that the market was already on a bearish trend before the coronavirus hit, and that what were seeing now is a bubble bursting, and not just an extremely heavy dose of negative sentiment.

Then again, before the coronavirus struck, both the US and the Chinese economies were continuing to deliver significant growth, in spite of trade tensions, and that the market as a whole was cautiously optimistic that in the longer-term these tensions would ease.

So, a mixed and confusing picture.

The virus is spreading, but how much impact it will have remains to be seen. The numbers, at least on the official count, are already beginning to slow inside China, and China is getting back to work.

And yet, how much the rest of the world wants to believe the latest Chinese data remains an intriguing question – indeed, it is perhaps the key question of the globalised era that so much international trade is beholden to a totalitarian regime where there is no freedom of information or independently-vetted newsflow.

When profits are involved, the world can just about wear that kind of conflict of interest, as the recent kow-towing of the American NBA basketball league to Chinese business shows.

But when it comes to epidemics and contagious viruses, attitudes to systems of government and trade become far less certain. Already, prominent voice on the right in America, like Tucker Carlson, have drawn a direct line between the rapid spread of the virus and globalisation. And Donald Trump himself has boasted about how a swift travel ban and a severing of certain international links has helped to prevent the virus spreading to the US in a more serious manner than it already has.

The left-right political battle in the US couches such decisioRead More – Source