2020 Covid-19 Welcomes Markets
I don’t have many experiences with viruses, I barely remember the H1N1 and now the well-known Corona Virus or now called Covid-19. Typically I would be concerned only about health and having some preventing terms if I’m traveling. Still, I’ve seen that a virus of significant proportions should not only concern us solely on health matters. I’ve seen many memes about people opening packages coming from china and getting infected. This might have been amusing when I saw it at first, but it can be quite tragic if things get out of hand.
I believe what makes a virus powerful is how infectious and how deadly it can be. Another major factor is its origin, and I think this is key in how it can impact globally. At the time, there is no cure o vaccination to confront this latest virus. It has recently reached different parts of the world and making its propagation harder to control.
So how does the Covid-19 affect the economy?
Whenever a country that has a significant impact on the economy goes through a rough time, whether it's a virus or political problems, it can end up being harmful to other economies.
China is one of the biggest exporters in the world, isn’t everything made in china? China has an unknown virus that has been spreading, and no cure revelation yet can be more harmful than many realize. This detrimental impact on the economy works both ways; it affects companies within china affected because of the virus because people are not consuming things like before. For example, people have been preferring to stock up on disinfectants such as Lysol and Dettol rather than picking a social gathering and drinking beer. Hence "Shares in AB InBev, the world's largest beer maker, fell 9% after it forecast muted growth in 2020, partly due to the outbreak" this due to the low sale of beer during the Chinese new year February 12, 2020.
Stock markets have gone down, and that includes the crypto market. The virus has affected the performances of many companies who rely on production from china, and shares have been affected because of this as well. As the infection spreads, so does the speculation, and lousy economy forecasts mean that it will have a negative impact on the market.
There are two ways to react to it; some may decide to abandon the ship before it’s too late, or others may see as an excellent opportunity to invest more because stocks are plummeting.
This is how some of the major stocks look like now:
“The Financial Times Stock Exchange 100 Index, also called the FTSE 100 Index, FTSE 100, FTSE, or, informally, the "Footsie," is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization.”
I don't want to discredit the importance of this virus or the fact that many have died. Yet throughout the years, we have had similar cases of unknown infections, end the word speculations, and market collapse theories. Each time similar patterns are followed, people get scared and begin to stock up food and provisions; news channels put the spotlight on it, and it's downhill from there. It makes you feel like you have heard this story before.
Maybe this outbreak is the last straw the financial market needed to fulfill the collapsing predictions such as the one DavinciJ15 pointed out last year, that surprisingly fits perfectly with the date and our current financial status.
I’m not saying not to take the precautions you feel safe with, at the end of the day, most just prepare for the worst and hope for the best.
By: Carolina Pérez