On Monday, the Dow Jones industrial average dropped more than 1,000 points, and the blame is being placed on growing fears surrounding the spreading Coronavirus, which threatens to cause an overall, world-wide economic downturn.
Over the last few weeks, the Coronavirus has spread beyond the borders of China. The illness has been reported in multiple European countries, as well as South Korea and Iran.
Senior investment strategist for Allianz Investment Management, Charlie Ripley, told Forbes today that “[t]he interruption to business and supply chains is becoming more prevalent.”
The virus has disrupted travel, which is hitting American airline companies particularly hard. On Monday, Delta dropped by 7.4% and American Airlines dropped 9.9%. Industries whose products are made either in China or somewhere in Asia have also been hit: Apple, for example, which operates in China, fell about 4% Monday.
Cruise lines have been front and center in national news lately, as passengers have been quarantined on ships for weeks, to prevent the spread of the virus. Due to the virus, Carnival fell 8.5% and Norwegian Cruise lines fell 9.5%.
According to CNBC, today’s drop was the largest in two years, but we were far from the only market experiencing this downturn. CNBC is reporting that “the European Stoxx 600 dropped more than 3% while Korea’s Kospi index slid 3.9%. In Hong Kong, the Hang Seng index fell 1.8%.”
CNBC also says that “traders are loading up on traditional safe havens such as U.S. Treasurys and gold” in an attempt to protect themselves, while it seems the Coronavirus will continue to spread across many different regions.
While some financial experts are hoping for a rebound on Tuesday, it’s hard to predict exactly how much economic damage may be caused by the Coronavirus in the coming weeks and months.