Market Overview

The Effects Of The Coronavirus On The Market

Share:
The Effects Of The Coronavirus On The Market

The market is suffering from earthquakes as companies continue to warn about the impact of the COVID-19 virus (coronavirus). Tech juggernaut Apple Inc (NASDAQ: AAPL) was among the first who has already warned of a shortage of iPhones but other US companies are also starting to break a sweat. If the impact is as serious as some investors suspect, it could derail the longest economic expansion in U.S. history.

That means there are political implications too. Even for Donald Trump has made a roaring economy a central part of his re-election bid and such wobbles could make his case for another four years more challenging. Travel companies around the world also continued to suffer. In the UK, among the FTSE 100 the greatest drop was suffered by EasyJet (OTC: ESYJY) , which sank 16.7%, while British Airways owner International Consolidated Airlines Group, S.A. (OTC: ICAGY) was down by more than 9%.

Latest Effects On Other Stocks And Markets

Which stocks and markets will suffer the most from the outbreak will depend on several factors, like where the virus will spread, the number of affected people, market position and what market mostly relies on the infected area, etc. Some markets may fight for a while, but eventually, they are bound to feel the impact. This means that the entire U.S. stock market could be exposed. The last few days have been full of heavy selling at a quick pace, and the market felt down for four days straight.

The S&P 500 index fell for approximately 3%, the Dow Jones Industrial Average for 3.15%, as well as NASDAQ composite for 2.8%. Some of the best ETFs also suffered some decreases. The iShares Expanded Tech-Software Sector ETF (IGV) dropped 2.8%, while the Innovator IBD 50 ETF (NYSE: FFTY) slipped 3%. The VanEck Vectors Semiconductor ETF (NYSE: SMH) had a similar result and lost 2.9%. These several days of heavy selling really placed the market under pressure on Monday and Tuesday, but after that tumble for several days, the indexes and indicators started coming back to normal and higher values.

Tesla Inc

Tesla Inc. (NASDAQ: TSLA) stock has been in a negative trend since the week began, and it  fell more than 7% on Monday, mainly due to fears of the spread of the pandemia and its effect on the world economy. Having in mind that one of three Tesla's Gigafactories is in Shanghai, the virus outbreak might be a significant slowdown and temporary barrier for Tesla's plans.

Having in mind that the company is quite dependent on its China factory, while the competition has a little better diversification of its assets, Tesla might be more concerned than other auto manufacturers. This comes at a not-so-great time as Tesla has been working on meeting all the requirements to add its stocks to S&P 500 index in order to push its stock further.

Bob Chapek Steps In As Disney's New CEO

Prematurely stepping down of Walt Disney Co's (NYSE: DIS) long-serving CEO Bob Iger pushed Disney's stocks to its lowest values since April 2019. First, the stock fell during Monday's tumble for 4.3% and continued to decrease on Tuesday for 3.6%. Bob Chapek, who has led Disney Parks, Experiences and Products since 2018, will take over as CEO. The initial plan was that Iger resigns in 2021. But he will stay with the company, directing future "creative endeavors".

Salesforce Co-CEO Steps Down

Keith Block, Salesforce's (NYSE: CRM) co-CEO since 2018, announced he is stepping down, leaving the company founder Marc Benioff as the lone CEO. This all came after several straight days of stock decrease. Maybe this was a surprise for some, since many saw Block as next in line as Salesforce's sole CEO if Benioff decided to withdraw. The announcement also stated that Block will remain close to the company on advising position.

Outlook

The Fed sees the Coronavirus as the threat to global growth. Moreover, some analysts find it could burst some bubbles, as in the case of Tesla. Investors have been trying to make sense of what the coronavirus means for businesses since January, but many fear that the market has underestimated its impact and that we're in for a severe correction.

This Publication is contributed by IAMNewswire.com

Press Releases - If you are looking for full Press release distribution contact: press@iamnewswire.com

Contributors - IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

Copyright © 2019 Benzinga (BZ Newswire, http://www.benzinga.com/licensing).

Benzinga does not provide investmentadvice. All rights reserved.

Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga Pro (http://pro.benzinga.com).

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Image by Pexels from Pixabay

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

 

Related Articles (AAPL + CRM)

View Comments and Join the Discussion!

Posted-In: Earnings News Guidance Emerging Markets Emerging Market ETFs Commodities Global Top Stories