Last Updated on March 8, 2020 by Mark P.
The World Health Organization called it a global pandemic, China isn’t being very open about where it may have actually came from, and to make matters so much worse, media spins and stock market dumps have everyone wondering whether the effects of the Coronavirus will have deep, long term effects on the global market in general (especially since China is the global hub of most of the world’s manufacturing).
According to retaildive.com, the negative impacts seem to primarily be what experts are focusing on in the short term, stating that perhaps “most disrupted is the supply chain, as factories shutter within China (compounding issues introduced by the Trump administration’s tariff policies last year).
This week, the epidemic also hit home for Amazon and REI, which both operate in the Seattle area where a few U.S. cases are clustered.” So essentially, we are seeing both the administrative sector of major multinational corporations line up in a time when the leader in industrial manufacturing is at a halt because of these health concerns.
However, while we are seeing an overall plunge in the stock market, this is only seen as a massive problem in comparison to the large amount of overall economic growth we have seen since markets started seeing giant gains in the fall of 2017. The site continues to point out that “The National Retail Federation at the end of last month maintained its prediction for retail sales growth this year of 3.5% to 4.1%, to more than $3.9 trillion, despite uncertainty around the trade war, the COVID-19 outbreak and the presidential election.”
So essentially this health emergency might not be the immediate and primary source for the current scares we are seeing on the market, instead primarily being just another factor adding onto an already precarious situation. They continue to point out that “At that point, however, Coronavirus was already coming up in dozens of earnings calls, even pushing down guidance in some cases, and that has only escalated since.”
So there you have it, a large stock market boom (thanks to a large part in bullish hedge funds), the antics and worries that typically come with a uncertain presidential year, and drastic changes in trade policies between two global economic engines (the United States and China for those not paying attention), were already adding to the market environment we see Coronavirus adding fuel to this proverbial fire.