Coronavirus Affects Global Market

The coronavirus (COVID-19) outbreak is an absolute tragedy, affecting billions of people throughout the entire world. What started as a disease centered in Wuhan, China is now a global pandemic affecting over 200 countries. As this devastating outbreak continues to evolve, health officials, pharmaceutical workers and medical specialists are working each and every day to develop and test vaccines that can potentially obviate the spread of COVID-19. Additionally, government officials and community workers continue to seek methods to regulate society and alleviate the problems associated with this unprecedented catastrophe that has devastated the entire human population.

COVID-19 has completely shaken up business and consumer behavior on a massive scale, giving rise to the need for businesses to alter the ways in which they operate if they wish to continue generating profit. Nonessential businesses such as museums, movie theaters, gyms, salons and malls have all been ordered to shut down in an effort to slow the spread of the disease. Unfortunately, closing nonessential businesses has resulted in thousands of Americans losing their jobs and, in turn, filing for unemployment insurance. Bars, restaurants and food courts are allowed to offer takeout or delivery but are required to enforce social distancing when possible.

The primary initial business-based impact of coronavirus was on companies’ suppliers. China was the first major region hit, resulting in shutdowns of plants and factories, many of which were depended on by prominent companies to manufacture goods and products. Foxconn, Apple’s primary iPhone manufacturer, shut down most of its production in China early on during the coronavirus outbreak, and because of that, Apple experienced shortages on its iPhone supply. The rapid spread of coronavirus has also caused several significant tech conferences to be called off, resulting in a multitude of missed partnership opportunities. The Mobile World Congress in Barcelona, Spain normally brings together the biggest mobile communications companies to network, share innovations and establish new partnerships. Business professionals predict that the cancellation of this event alone will result in over $1 billion in direct economic losses alone.

As COVID-19 continues to devastate the economy, the growing need for remote interactions has highlighted the need for 5G technology that would ensure fast, immediate communication and increased connection density for remote interactions. Two prime areas in need of remote technology more than many others include telehealth and teleconferencing. With improved telehealth networks, physicians would be able to better diagnose and treat patients without physically being with them - a necessity in this time of crisis; and with better teleconferencing systems, users would have an easier time switching to remote work, thus ensuring employment.

In addition, the COVID-19 panic has completely decimated the stock market, bringing it to almost unseen levels of volatility. As a result, the market has been triggered with wide circuit breakers.

“The S&P 500 triggered level 1 market wide circuit breakers during the opening hour on March 9, 12 and 16 based on drops of 7 percent from the previous close, and tripped later in the day on the 18. Trading also halts on both the Dow and the Nasdaq when a circuit-breaker is triggered on the S&P 500,” the World Economic Forum said.

Ultimately, the rising uncertainty of coronavirus has created some of the largest day drops investors have seen in decades. Most stocks are being affected in some way or another, however oil stocks have plummeted much more than others - a result of travel cuts and factory closings. Claudio Galimberti, the Head of Demand, Refining and Agriculture Analytics at S&P Global Plants, predicts that these coming months will record the worst oil demand contraction since the Great Recession.

All in all, COVID-19 has taken a huge toll on existing businesses and the American economy, but as new technological innovations arise and the spread of this destructive disease slows, society will hopefully soon resume as normal.