Global stocks will likely continue to rally as people realize the coronavirus outbreak is not likely to cause long-term effects on the markets, China Beige Book's chief economist, Derek Scissors, told CNBC on Thursday.
"This isn't a natural disaster that destroys capital stock," he said on "Squawk Box." "As long as people recover fully, it's not going to affect productivity."
China is facing a short-term GDP drag, and companies with international stakes will face some earnings hits, but long-term growth should stay stable, added Scissors, whose China Beige Book firm is an independent provider of Chinese economic data.
"The trajectory of China's growth of demand for U.S. products in China, of Chinese supply in the global supply chain, that's all the same" as it would have been, said Scissors, also a resident scholar at the conservative-leaning American Enterprise Institute think tank. "So, if you want to trade really short term, then fine, you'll have a short-term earnings hit. Looking a year out, those companies should be in the same kind of financial position as they were six months ago."
China's Shenzhen Composite index surged nearly 3% while the Shanghai Composite gained 1.7%.
On Monday, Chinese stocks plunged on the first trading day there since the extended Lunar New Year holiday. Investors in China got their first chance to react to the widening the coronavirus outbreak.
Over the past few weeks, American companies with operations in China have issued warnings to investors as the fast-spreading virus hits demand.
Nike on Tuesday said it closed half of its stores in China and added that it will have a "material impact" on its operations across the country. Tesla has also temporarily shuttered its stores in mainland China, according to an online post from a company sales employee. On Thursday, Yum Brands warned that its 2020 results could fall short of its long-term outlook as the outbreak weighs on sales in China.
Health officials around the world are also scrambling to stop the spread of the new virus, which was first discovered Dec. 31 in the Chinese city of Wuhan in Hubei province.
China's National Health Commission on Wednesday raised its confirmed coronavirus cases in the country to 28,018. The death toll rose to 563, with one additional fatality in the Philippines and one in Hong Kong.
The World Health Organization said there's been more than 150 coronavirus cases in about two dozen countries outside of China and declared the virus a global health emergency.