An article published by Jeffry Bartash of Market Watch on the first of February, 2020, suggests the damages that will be inflicted on Wall Street by the spread of the Coronavirus in China and other parts of the world. Bartash starts by explaining that the fear factor of the virus alone has already had a negative impact on the stock market. The Dow Jones Industrial Average, or DJIA, decreased 600 points on Friday. The impacts on the U.S. that are already present include flight suspensions and the temporary shutdown of U.S. companies in China. However, these impacts are likely to grow because of the status that China has in the world. China is home to the second largest economy and one fifth of global GDP, along with being the largest center of manufacturing in the world. It is also one of the largest trading partners of the U.S. and a decrease of good and services leaving China would greatly harm U.S. economy. Bartash also predicts a .5% decrease in U.S. GDP during 2020.
I agree with Bartash's argument that the U.S.'s economy will suffer throughout the coming year. Not only will the Coronavirus's impact on China harm the U.S., but the countries in which the virus is spreading will also have an impact. Tourism to China and neighboring countries from the U.S. will decrease, along with tourism to the U.S. from China. This will decrease revenue for both countries. The World Health Agency has declared the virus an international emergency, but it will also have a strong impact on economies.
https://www.marketwatch.com/story/coronavirus-spreads-damage-to-wall-street-could-the-us-economy-be-next-2020-02-01
3 comments:
When a top 5 economy is affected in such a drastic way it almost begins a snowball effect with other economies around the world. Since the world is so dependent on trade a nation like China suffering economically hurts everyone connected to them. Since China is such a large trading partner with the US, we are likely to see them suffer as well and then this begin to effect people who trade with us. It will be interesting not only to see how individual economies recover, the world economy as well.
This is a good example of a negative externality. The virus is not only taking lives, but also drastically impacting global markets. I'm not surprised that the virus has negatively affected stock prices since China is the US biggest trade partner. There's a trickle down effect on other world economies when the two biggest economies are feeling the full blunt of the force.
I agree with this. The virus has been spreading throughout the world and it has the potential of spreading it more. But, I believed China are trying their best to contain this virus so it doesn't affect too much on the world. I read in an article that they are going to build a 1000 bed hospital in just 10 days to handle the virus in Wuhan, China. So, I hope they find a way to contain this.
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