At lunch time on Monday, the Dow Jones Industrial average was down almost 1000 points amid Coronavirus fears. This comes as European markets also were down due to fears of spread across Italy. On Friday, Italy had 3 confirmed cases. By Monday, they now have over 200. This is the biggest spike outside of Asia of the COVID-19 virus.
As of last week, the stock markets in the US had held strong against the fears of the virus. That certainly changed on Monday as S&P 500 and Nasdaq both joined the Dow in shedding over 3% by lunch. Fears continue that the virus may cause more issues economically. Several media outlets reported 6 year lows due to the virus.
The World Health Organization (WHO) is urging world leaders to do more to prepare for the virus. The guidance issued is to prepare for a pandemic. As more and more countries report cases of the virus, the eventual classification as a pandemic seems to become more evident.
The WHO does admit that the virus is still somewhat contained and is not an unrestricted global spreading virus at this point. While the statement says that there is confidence that it can still be contained, the preparations should be as if this will be a pandemic.
The US CDC says that it is responding to the virus and preparing for potential spread throughout communities. On their website, multiple steps being taken to prepare first responders and healthcare facilities are listed. The White House was preparing to ask Congress for emergency funding to address the coronavirus outbreak in the United States.
Some outlets initially reported the request to be $1 billion, a number that many indicate may not be enough. The administration has pushed back on this and no final figure has been released. A reminder, this is only the funds to prepare to contain and treat those with the virus.
It is estimated that the virus will cost over $1.1 trillion in lost income to the economy. As we discussed on this weeks podcast, it is expected to see the economy have a dip due to the virus, but the hope is it recovers quickly. The chief economist at the IMF is still not expecting the coronavirus to take off more than .1% of the forecasted growth for the global economy.
In a recent interview, it was actually said that a v shaped recovery is still expected. While the IMF has maintained a positive outlook, others have been a little more aggressive in their statements about potential issues. The IMF will update it’s guidance in April for the remainder of the year.
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