The coronavirus continues to cause a plethora of problems for consumers and producers all around the world. As the stock markets and the indexes that represent them continue to fall, the market will begin to show many signs of adding to the global recession. As signals that show that a recession is coming have continued to go off, there is also little progress with containing the coronavirus. As the article describes it, the global supply chains have been hit incredibly hard as some of the largest exporters of goods have been hit hard, and no other countries are wanting those goods as the fear that they may bring over contamination. Which other signs outside of the stock market should we be looking at more closely now that stocks have in fact showed signs? Also, how can stocks recover from this shock?
Link to article- https://www.msn.com/en-us/money/markets/stocks-trim-earlier-gains-as-coronavirus-fears-linger/ar-BB10ocnq
7 comments:
I think it is crucial to look at where the virus is spreading, and the severity of the cases. With increasing news about the virus and its growth, consumer animal spirits are being negatively impacted which is causing the reduction in stock value and trims to take place. The volatility in markets is due to a gauge of fear spreading along with the virus, and stocks won't be able to recover until there is a viable cure presented for the virus.
In agreement with Sophia, I think looking at if the coronavirus is spreading to some larger economies like the US and Germany. When this becomes an issue, we must worry about the looming global recession. Especially since other signs like the yield curve inverting, we must look ahead at how we are going to get out of it. The world recession is something that is harder to recover from, so it will be very hard, maybe impossible, to recover stocks.
I think we should most definitely look at what steps have been taken to attempted to contain the virus along with where it is spreading and how close it is to consumer products and supply chains. We should also look at how this will, in the long-run, affect the global market as a whole and what kind of issues that may cause in the United States. I agree with Sophia in the fact that the stock market will not recover until there is a comfort in the public knowing that they are safe and the future is more predictable.
I agree with all of them, consumer confidence is really going down with the virus and it will take a while for the stocks to recover. But, looking at it, most of the countries are working really hard to contain the virus and if really find a way to contain it, it will be a boost to everyone. I personally don't think this virus could go mayhem, but I could be wrong. I have also read that Japan is considering to cancel the 2020 Olympics. But, I think we have to wait for more from big countries to lead on containing the virus.
While the market falling incredibly this week was quite scary, we must also take into account how much it has grown over the past couple of years. Although we have lost a lot of progress made, I think that this could be a sign of the US falling into a period of less growth, but not one of decline. I think as industries adapt to the fears of the virus impacting the labor force around the world, there will be little growth but I do not expect a recession. It will take some time to recover the losses experienced this week but also it has been a wake up call for many US firms to figure out how to deal with labor force impacts that we have not seen in some time. For now, I think that containment is the best idea and has been working in places like Germany. In addition, making it more difficult to get into the US will be a good temporary solution to prevent further infections.
at this point this is all a matter of time. This virus will pass sooner or later and depending on how long it takes is how much it will affect the world economy. It's hard to say how far the stock market will dip but all we can do is hang in for now.
I agree with Sophia that fear of virus is a big driver of the stock market dropping and it will be hard to recover until there is a cure or we find a way to contain it. Monetary policies set by the Fed can also be a way to incentivize spending and investing which can also cushion the stock market
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