Everything Investors Need To Know About Coronavirus
- Mar 17, 2020-
Everything Investors Need to Know About Coronavirus
Concern about the highly contagious Chinese coronavirus is taking a toll on global markets and companies. The pathogen, which has spread from the city of Wuhan to dozens of countries, including the U.S., is a global health emergency, according to the World Health Organization. It has claimed more than 350 lives and infected more than 17,000 people.
Here’s what you need to know about the coronavirus and its impact on markets.
What is coronavirus?
According to The Wall Street Journal, the Wuhan virus, named 2019-nCoV, likely came from bats, but not much else is known. Similar to MERS and SARS, the disease is spread between people in close contact via coughing or sneezing, according to the Centers for Disease Control. The CDC says the immediate health risk to the general American public is low.
One model, built by Cascend Securities, forecasts that as many as 800,000 people could be infected and 200,000 people could die from the virus if those who have caught the disease aren’t quarantined by September.
The reaction in the U.S. has been mixed. Stocks fell initially but rebounded on Tuesday and Wednesday as investors reacted to reports of strong corporate earnings. Worry over the virus dragged on the market for much of Thursday, though shares ended in positive territory. The impact on U.S. markets could still grow.
Travel and gambling stocks have been hurt as travel is restricted and people cancel vacations for fear of being exposed. The usual flood of Chinese travelers to the casino hub of Macau has become a trickle.
What does coronavirus and the possibility of a vaccine mean for biotech stocks?
Shares of a handful of small and mid-sized biotechs that are working on vaccines for the virus have soared. Analysts say it is unlikely the vaccines under development could make it to market in time to yield revenue from the current outbreak.
Oil prices recently fell to a three-month low, and U.S. benchmark crude is on track to suffer a loss of more than 12% in January as coronavirus intensifies the impact of seasonal weakness in the market, raising prospects for lower fuel prices.