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As the coronavirus from the Wuhan province of China continues to spread throughout the world, global stock prices are falling. The World Health Organization declared the Wuhan coronavirus a world health emergency and has issued numerous warnings regarding the respiratory illness.
When US markets opened on Monday, the Dow was down nearly 1,000 points, representing a 3.4% fall. Similarly, the Nasdaq was down 4.3%, the S&P 500 was down 3.2% and the VIX, a measurement of how volatile the market is, was up 40%. Now’s not the best time to buy if you’re looking for good investments. For beginners, this would be a rocky introduction to the market.
As the coronavirus spreads, fears about its impact on human lives and market performance are driving economic insecurity and very human fears of infection and loss of loved ones. The number of cases of the virus have shot up dramatically in South Korea and in Italy over the past few days, resulting in major economic fears that those important markets could slow dramatically.
In South Korea, fears of infection spurred a loss of 3.9% to the Kospi, the South Korean market index. The number of cases in the country has now exceeded 800. In Italy, meanwhile, the number of cases has climbed above 200, and officials have shut down numerous public buildings and schools to address the spread of the virus. The Italian index was down 5.7% Monday morning.
Both Japan and Germany are on the brink of recession. A global slowdown in production due to factory shutdowns and lessened consumer demand could knock both countries into full-blown recessions and see global markets freezing up in ways they haven’t since 2009.
While the US has had strong market showings in spite of the virus, the sudden spike in cases in Italy and South Korea have led many to fear a potential pandemic scenario where the virus has wide-ranging impact all over the world.
While markets were down Monday, deaths related to the virus have now topped 2,620 worldwide. The virus, which affects the respiratory system, is a cousin of other lethal viral diseases like SARS and MERS. Estimates hold that there have been around 79,300 cases of the Wuhan coronavirus worldwide.
