The Economic Impacts of Global Epidemics (Influenza), Covid19 / Coronavirus

First of all, the world-wide interconnection also called globalization is as high as it never was… so impacts in one (geographical) area, sometimes even small ones, could have influences on other areas or even much further. So actions and impacts spread much faster than information, knowledge and know-how which generates insecurity. In times with insecurity, investors move away from “riskier” investments into assets that are perceived secure - things like e.g. gold (which does not mean it is more secure than others).

As far as I know, no one has a crystall ball… therefore, one can only rely on history. Doing an analysis of similar incidents in the past shows that the impact on the stock market is rather small. The best we can do is rely on statistics and probability.

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Welcome into the forum @qadligon!! :smiley::smiley::smiley::smiley::smiley:

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Welcome to the community @qadligon!
Be sure to check out the many interesting topics in the forum and head over to the ‘introduce yourself’’ page and tell us a bit about yourself.

That statement is so true! Panic sets in and people react, causing the markets to really fluctuate. Once things calm down, the markets get back to a more steady movement.

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Here is one great article about how the Coronavirus will impact the global markets.

As a personal opinion, I believe that we (the public) don’t realise what’s coming and how bad things will not in 1-2 years but in 5-6 years. The amount of money they countries will need to pump we will pay for this later.

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Itake this info from my business area: https://www.rutronik.com/corporate-news/releases-2020/coronavirus-effects-on-the-delivery-situation/
Some companies extended Chinese New Year vacation by 10 days = 2,7% from a whole year. Some companies reported lower production capacity by at least 10% in Q1 (that is about 2.5% loss from whole year).
I like the wording from the article mentioned by @l.losada.ferreira - instead of any loss, predicting just slower growth.

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I think the reports and fear will have an impact on the markets, probably more so than the actual effects of the virus (China restricting travel and people not working/spending).

Short term the markets will take a dip but ultimately come spring/summer when this has died down the markets will likely carry on as normal and maybe even perform better if there is pent up demand.

I do wonder about a link between coronavirus and the rally in cryptocurrencies. Maybe people are thinking as the markets are dropping due to the virus they will put their money in crypto instead.

It will also be interesting to see if next winter the virus makes a return and whether it will have a much larger impact then.

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Big investors look for any news to create an opportunity to sell off and create a drop in markets. Then, when things settle, they buy back in at lower prices and pocket the gains. Market returns to normal and they make out big.

Don’t get me wrong. Epidemics like this are going to glow the economy due to the partial shutdown of global supply and manufacturing networks. And Chine is probably the worst place for this type of outbreak, because that are one of the biggest suppliers in the world of both parts and labor.

In the end, I would expect that this will be contained and the markets will return to previous highs, as the economy is very strong globally right now and it can survive this.

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Thanks @qadligon for being apart of pynk. You’re a pynkster:)

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Yes, I think the virus has a very strong and long-term effect on prices !!! People want to protect themselves and their assets, the shares of many companies have fallen in price, the contribution to cryptocurrencies is an investment in the future - I’m talking about proven projects and some new ones! All the great tragedies, such as massive fires, floods and viruses, to some extent affect the markets of certain currencies and stocks! Investments are a ‘guarantee’ that the savings will not burn out, do not steal and do not drown

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Hi @DenzelEtherio. Welcome to the community. Head over to ‘introduce yourself’ and share a bit about you.

Investments are not guaranteed so perhaps you can clarify that statement for us.

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Hi, my take on the latest virus - first of all my heart goes out to people who have lost their lives to this! From a Financial markets outlook, fear always drives markets and Gold is the most obvious ‘safe’ asset as until we get a clear view of this virus. The main industries of Travel, Transport and retailers will have a contingency plan for such events but as they happen very infrequently most will be able to recover. The main things to look at in my eyes are Pharma stocks developing a vaccine for this, we got through SARS but nothing lasting came out of it, hopefully the lesson has been learnt. Stay safe!

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Welcome @DenzelEtherio. Glad to have you here. Can’t wait to read your thoughts.

Interesting, one thing that I have been mentally milling over for the past few days. There seems to be a growing consensus that we are headed for a global financial crisis, several of our best indicators - Schiller PE as well as some anecdotal information from traders in the media seem to support this.

I’m not an expert on financial markets but i wonder if there’s a possibility of this being the ‘straw’ that breaks the camels back to use the, admittedly clumsy, analogy.

What do you guys think?

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It’s hard to add something to what @Thewseph, @ZackofPynk and others already said about impact of epidemics.

After some time has passed from intial corona virus news S&P 500 did went back on track and made new all time high.
With that said I hope this epidemic doesn’t get bigger than it is.

I wonder how can an epidemic or a natural disaster in China affect bitcoin mining farms.
Since a very big chunk of mining power comes from there, can a shutdown lower supply of bitcoin enough to make price go up if demand stays the same?

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Thought: If you invest in 4-5 projects, it is 100% more profitable than drowned or burned money…

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I guess this is the kind of thing that could easily have ripercussion on the mid-long term more more than on the short…like when the data about global profuction comes out in detail. This definitely one of this kind in my opinion…:grimacing:

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Markets were always going to scare abit from this particilarly i suppose because many other countries are linked to where the outbreak is, but like others have said it seems abitnof scare momgering

But i think there is definite uncertainty for the future, and perhaps because of how china is we feel
We may not have the true story

Bit coin didmt really take a hiy too much and is still rising so it seems and makes logical sense that this is a safer investment similar to gold, partiicularly when seeing how news such as this affects the other global markets

I dont think there will be a lasting impact in fee months i see this virus just being considered as something as flu or something and not something to think as so bad, but coild take a while to recover its difficult to say it’s probably going to impacted by how the government reacts when normalisation resumes and then if we think their right to put things back to normal

I cant really remember what occured with markets with similar things but omagined a drop but things will recover but if this is going to be a few months then gold and crypto will be our safest investments and then if more
Are investing in crypto perhaps will be a further shift of getting crypto more popular among more people

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Hi, yes I agree there are lots of huge warning signs out there. US Student debt, most of the large EU countries in recession (along with Japan) and now a potential global virus. Also the ‘natural’ cycle is a recession every 8-12 years so we are once again there.
I personally feel that Trump can’t or won’t let this happen on his watch, we will see if that ends next year or we have 4more years of him. He failed a lot in business he surely can’t fail with a country…or can he?

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The US student debt is so far out of control, they are now talking about programs to eliminate it and some colleges are offering tuition-free education. After Trump was acquitted in the impeachment hearings, his approval rating went up, so 4 more years may happen. The coronavirus isn’t under control yet but it’s just a matter of time, so I agree the negative impact on the economy is temporary. The markets, as a whole, are cyclical so we will see a recession again, but when?

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Many aspects have been already described by other members of this forum. I would like to add my two cents:

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