An everyone problem... Coronavirus. The World Health Organization hasn't declared it a global pandemic yet — that would mean uncontained global spread and large scale deaths. But 2 more countries are scrambling to control the infectious disease:
- South Korea: 231 new cases on Monday, bringing the total to 833. The highest level of national alert was issued there.
- Italy: Now the largest coronavirus outbreak outside of Asia — cases surged from 3 on Friday to over 219 on Monday. Over 50K people in 11 northern Italian towns are under quarantine.
Think of each country as a huge factory... a huge shopping mall, and a huge tour group. China's 3 economic "personas" have all been shuttered because of coronavirus. And that's affecting the whole world:
- China, The Factory: Companies like Apple, Nike, and Honda shut down Chinese factories and/or slow production. 94% of the Fortune 1000 companies are seeing coronavirus supply chain disruptions.
- China, The Mall: People in China are staying home to avoid catching/spreading the disease — that hurts Chinese consumer spending (Apple, McDonald's and Starbucks shuttered stores).
- China, The Tourist: China has over 1.4B people and an outsize impact on global tourism. Travel restrictions have hit the airline, hotel, and luxury retail industries outside China especially hard.
The economy has reason to worry, but not to freak out.... Over 2.5K coronavirus deaths have been reported so far in China, and at least 33 in other countries. The WHO thinks it has "pandemic potential." And it's taking a real toll on global markets.
- But long-term investors shouldn't panic, according to "buy low, sell high" guru Warren Buffett: "We think the 20 and 30-year outlook is not changed by the coronavirus.”
- TBD how investors will continue to react in the short-term.
Latest Stories
Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate, including Robinhood Markets, Inc., Robinhood Financial LLC, Robinhood Securities, LLC, Robinhood Crypto, LLC, or Robinhood Money, LLC.