Perhaps it was a coincidence, but it seemed a jolt to Wall Street is what has spurred White House officials to take up action against the coronavirus.
On Monday, the stock market dropped by more than 1,000 points in trading, topped by a 900-point slide Tuesday. The sell-offs represent the biggest declines in two years and are attributed to fears of the virus’s economic impact.
On Tuesday, skittery White House officials requested $2.5 billion to help stop the spread of the virus which, it confirmed, is likely to spread across the country.
While this may not yet be a health pandemic, it certainly is turning into an economic one. That’s because we are a global economy and what happens in China affects what happens in other industrialized countries. When China stops producing computer chips for six weeks, iPhone sales are directly affected. The same goes for GE appliances, Caterpillar tractors and the Big Three automakers that all depend of Chinese manufacturers.
Ever since the virus was discovered in late December, economists had hoped it could be contained to prevent widespread disruption to production. But with cases being reported in 33 countries across Asia, Europe, the Mideast, Africa, Australia, and now North America, those hopes are fast-fleeting.
Health officials with the U.S. Centers for Disease Control and Prevention are telling us “this might be bad.”
“We need to be preparing for serious disruptions of our lives,” said Nancy Messionier, director of the CDC’s National Center for Immunization and Respiratory Diseases, including quarantining large sections of the public as has happened in China.
On Tuesday, President Trump downplayed the threat, assuring Americans everything “will start working out.”
The economic slowdown is now to the point it could hamper global growth, dashing the hopes that 2020 could be a rebuilding year after the disastrous trade impasses.
The economic sectors being hardest hit are in energy, travel, tourism and retail.
With huge swaths of China production still offline and people confined to their homes, the demand for energy resources has plummeted. Oil is now just under $50 a barrel, with crude inventories piling up five weeks running.
U.S. officials are asking all non-essential travel to China and South Korea be avoided. Older and at-risk travelers are also advised to stay away from Japan, Italy and Iran.
United Airlines reported Tuesday the demand for flights to China had virtually disappeared and requests for trans-Pacific travel is down 75%. Tourism in France, which relies on an estimated 2.7 million Chinese tourists, is down 30-40%.
DATA HELPS put the coronavirus into perspective. So far, 80,000 cases have been reported from across the world. Of those, more than 2,700 have died.
This year’s flu season in the United States has so far resulted in 280,000 hospitalizations and 16,000 deaths, according to the CDC.
While those numbers sound astronomical, it’s a typical year, health experts say.
