Today a powerful wave of pessimism is taking hold of the financial markets. The ongoing coronavirus outbreak is responsible for it, as the disease stubbornly continues to spread, spiking investors’ concerns for the scope of the damage the virus will do to the global economy.
The stock markets in the United States are rattled, losing whatever gains they managed to accumulate the past few days. In Europe the situation is similar, sparked by a growing concern that the virus has hit the European Union. Italy has registered over 200 patients suffering from the Covid-19 virus, the highest in Europe, and Spain is currently fearing the same after someone with the disease was found in a hotel.
The total number of cases is around 80,000 right now, with most of them in China. South Korea is also seeing a growing number of cases, with roughly 900 patients right now.
Still, there is hope, as at least two separate vaccines are entering the human testing stage of development. But it would still take weeks before there is medicine widely available to everyone.
Furthermore, a recent inversion in the US Treasury yield is also making investors apprehensive about the United States, the strongest economy in the world. Though this textbook sign of recession might not mean as much as some fear, there is a higher expectation that the Federal Reserve might need to cut interest rates earlier than expected to prevent further damage to the US economy.
