Is There Really A Justification For the Panic?
Forget what you may have heard about the stock market being affected by the coronavirus. Because as of February 5th, 2020 the stock market is soaring once again.
Although there is a lot of skepticism from public health officials . Global investors believe the deadly outbreak could be stopped.
Hopefully before causing even deeper economic wounds. More importantly, before more people are sick.
The Dow Jones as of February 5, 2020 was up 476 points by late afternoon, extending its rally for the third day. While the Standard & Poor’s 500 swelled nearly 1.1 percent, on track for a record close.
Nasdaq advanced 0.5 percent on the heels of Tuesday’s record close. And
European markets have nearly erased the losses from last week’s panic about the outbreak.
That’s Great And All, More Importantly, People Are Still In Dire Straits
This outbreak that sickened 24,000 people and killed nearly 500, With the benchmark Stoxx 600 index up 1.3 percent and approaching an all-time high.
The Shanghai Composite Index continued to rise from its recent brutal sell-off, also ending with 1.3 percent.
In terms of the virus itself, there seems to be some conflicting information between entities.
China reported that researchers at Zhejiang University had discovered an effective treatment for the virus. Which has spread to more than 20 countries.
While in Britain, researchers told Sky News a vaccine could be tested by next week.
Despite China’s local news reporting that there is effective treatment The World Health Organization disagreed. They went on to issue a statement saying there are no known cures for the coronavirus.
At a news conference Wednesday, the organization said it had seen more than 3,100 new cases in China alone. Requesting for $675 million in funding to contain the virus.
Inevitably This Will Mean Job Losses Across the Board
As of now, companies with household names are warning investors that the coronavirus outbreak will have consequences for their bottom lines.
Supplier Nike, which has closed half its stores in China, Saying that the outbreak will have a “material impact” on its operations in the country.
As well as Disney has said it could take a $175 million hit in operating income. Depending on if its theme parks in China are shuttered for the next two months.
However, Apple, which has closed all its stores and offices in China. With suppliers in Wuhan, the center of the outbreak, they gave investors an unusually wide revenue outlook range.
McDonald’s, Starbucks, KFC, Levi Strauss, H & M, and Samsung have all shuttered stores across China.
Casinos in Macao, the world’s biggest gambling market, are shutting down for two weeks.
Regardless of End Result, This is Still an International Tragedy.
Even if the current outbreak is contained completely, economists predict China’s growth rate will drop to between 3 and 4 percent this quarter.
There is a lot of chatter from individuals on social media that are stating that although things are out of hand with the coronavirus outbreak.
The general media is acting as if business is more important than society’s health. And that’s why there is a disagreement with health officials and China’s news media.
Only time will tell on what impact the coronavirus has on the market after the quarter is up.
