As the coronavirus continues to spread from the city of Wuhan, China, nearly all major airlines have canceled flights to China. This has caused a major disruption to Chinese trade and will undoubtedly have a significant impact on its growth going forward. Since my last column a week ago, the total number infections has increased by 400% and the deaths have increased by 300%. The coronavirus is much more serious than previously thought, however, the Chinese government has taken drastic measures to stop its spread.

While Beijing may be successful in stopping a pandemic across China, it will take at least two or three months for the stigma associated with travel to China to pass. Already many countries have stopped visa-free travel for Chinese citizens and some have banned Chinese citizens altogether until at least March. These are very serious steps and trade numbers will take at least two to three quarters to recover from the hit. Companies that had thought of sourcing goods elsewhere have hastened these moves, and Chinese firms will feel the pinch fairly quickly.

The good news is that the Chinese yuan was largely undervalued, which will allow the Chinese government to buy more foreign currencies to finance the very real drought that Chinese firms will experience this year while simultaneously keeping the yuan undervalued. Even if holders of off-shore yuan sell their reserves, this will help Beijing keep its currency competitive.

In the United States, the Iowa caucuses were held Tuesday with Bernie Sanders and Pete Buttigieg running neck-and-neck. At the time of this article, 71% of districts had reported results at the time of this writing. If "Mayor Pete" pulls off a victory, it will truly be monumental for his campaign, which has been faltering lately. If Sanders wins, it will gratify the guesses of many who predicted him as the favorite. The biggest losers of this election are former Vice President Joe Biden and Elizabeth Warren, both of whom were hailed as potential victors in Iowa. A major loss by either could spell the end of their run as it will most likely do for those who didn't place in the top five.

Andrew Yang and his "Yang Gang" put up disappointing numbers, and with that, his dream of a universal basic income has all but died. From here, I predict Yang will either give up or wait another two or three primaries before shopping around for a VP nod. Warren may follow suit if she doesn't finish in the top three in New Hampshire next week. By this time next week, the Democratic race will dwindle to three or four contenders, I predict, and then the real race for the White House will heat up. In the meantime, a further spread of the coronavirus will weigh on financial markets, as it has done already, and hysteria will set in if its spread accelerates.