Coronavirus fears reverberate across global economy

Investors, fearing that the spread of the coronavirus is tipping the global economy into a recession, handed the stock market its largest weekly loss since the 2008 financial crisis Friday amid worries that one of the longest economic expansions in history may be coming to an end.

>>Michael CorkeryThe New York Times
Published : 29 Feb 2020, 04:08 AM
Updated : 29 Feb 2020, 04:08 AM

With the virus now detected in at least 56 countries, companies are readjusting their annual profit expectations, economists are lowering their forecasts for global growth and policymakers have signaled that they are ready, if needed, to act to stabilize the economy.

As the stock market dropped again Friday, Jerome Powell, chairman of the Federal Reserve, issued a short statement affirming that the central bank would use its tools and “act as appropriate to support the economy.” After the Fed’s statement, the S&P 500 pared some of its losses, closing the day down 0.8%, though the index remained down 11.5% for the week.

Still, there were stark signs that the economic fallout from the virus had started to take hold, as retailers and homebuilders reported delays in shipments from China, Amazon was running low on hand sanitizers sought by a jittery public and financial regulators began monitoring whether US businesses were starting to have difficulty borrowing money.

People walk past the New York Stock Exchange building in Manhattan, Thursday, Feb 27, 2020. A global stock market meltdown entered its sixth day on Thursday, a decline that has reflected rising fears over the fast spreading coronavirus and pulled major benchmarks to near four-month lows. (Jeenah Moon for The New York Times)

There was clear evidence in recent days of the economic fallout. Toll Brothers, a luxury homebuilder, said some home sales to Chinese buyers had been postponed and shipments of fixtures from China delayed. Shoemaker Steve Madden said some shipments would be delayed by three weeks as its Chinese factories struggle to operate with fewer workers.

Perhaps even more troubling were signs that American consumers, who drive the economy, were becoming increasingly uneasy.

On Amazon, popular brands of hand sanitizers like Purell were largely unavailable. What was available was coming from third-party sellers at higher prices. On Friday morning, one pack of two 12-fluid-ounce bottles of Purell was being offered by a third-party seller for $49.99.

It was an awful week for markets around the globe. The Dow Jones plummeted 12%. In Europe, stocks in Britain dropped 11%, while Germany was down 12%. Asian markets also fell: 10% in Japan and 8% in South Korea.

c.2020 The New York Times Company