When we look at a pandemic virus from the figurative 30,000 feet, it’s not hard to see what sort of global, tidal impact it could have.
In China, there is very little “everyday life” left. The fear of catching coronavirus strain COVID-19 is far too great for citizens to attend any unnecessary gatherings. The movie theaters are empty. The restaurant seats stay cold.
As these viruses spread, people begin to stay home from work and school, and they avoid prolonged or frequent trips to the grocery store. They simply stop doing anything. Society comes to a standstill.
And when society slows down, so too does the economy.
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Money stops changing hands when people stop interacting. This, in turn, spooks the already-speculative stock market, which in turn triggers the press, and so on and so forth until we all start panicking.
Well, that time may have come.
Stocks fell sharply in volatile trading Thursday as investors worried the coronavirus may be spreading in the U.S. A slew of corporate and analyst warnings on the virus dragged down the major averages, tipping them into correction territory.
The Dow Jones Industrial Average plummeted 1,190.95 points, or 4.4%, to close at 25,766.64. The S&P 500 slid 4.4% to 2,978.76 while the Nasdaq Composite dropped 4.6% to 8,566.48. The Dow had its worst day since February 2018 while the Nasdaq and S&P 500 posted its biggest one-day loss since August 2011.
It was also the Dow’s biggest one-day point decline in history, surpassing Monday’s 1,031-point drop. The S&P 500 also closed below 3,000 for the first time since last October.
“We’re extremely cautious in the short term,” said Tom Hainlin, global investment strategist at Ascent Private Capital Management. “No one really seems to be an expert on the coronavirus. We haven’t seen anything like this really in our investing lifetimes.”
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