The coronavirus (abbreviated as COVID-19) has raised fears for traders on the stock market. COVID-19 is a flu like disease that first appeared in Wuhan, China about two months ago. 

As of this article’s publication, there have now been 83,909 cases with 2,869 deaths (all sources listed at the bottom of this article). This quickly spreading disease has been making headlines for the past two months. The momentum of this disease and its effect on trading with China and other Asian countries has slowly been ramping up. This caused a sudden sell off, which is a wide spread selling of shares of stock, in the U.S stock markets beginning on February 21st and then going on to have record sell–offs last week, dropping the value of many high value stocks. The Dow Jones Industrial Average, which is an average of 30 well known publicly traded companies that give a look at how the market is doing, dropped 10% last week.  

In particular, the media coverage of COVID-19 has made traders uneasy. There is fear that companies that import or export products to eastern countries will be hit hard by new regulations on travel because of the disease.  

This market crisis is bad, but it’s not the end of the world. It becomes a problem when people keep selling their stocks and stop spending their money in fear of a worsening economy. This lack of spending could start a domino effect, leading to a loss of jobs and an even worse market. Historically however, the market bounces back after such struggles, and in this case it may do so fairly quickly because of the actions of organizations like the CDC (Centers for Disease Control and Prevention) and the World Health Organization to contain and cure COVID-19. All it will take to cause a bounce back in the market is confidence that the coronavirus isn’t as bad as it is being made out to be in current media reports.  

Sources 

“Coronavirus Disease (COVID-19) – Events as They Happen.”  World Health Organization, World Health Organization, 29 Feb. 2020, www.who.int/emergencies/diseases/novel-coronavirus-2019/events-as-they-happen. 

“2019 Novel Coronavirus (2019-NCoV) Situation Summary.” Centers for Disease Control and Prevention, Centers for Disease Control and Prevention, 19 Feb. 2020, www.cdc.gov/coronavirus/2019-ncov/summary.html. 

“Coronavirus Cases:” Worldometer, 29 Feb. 2020, www.worldometers.info/coronavirus/#countries. 

Imbert, Fred, et al. “Stock Market Live Updates: Dow Loses Nearly 4,000 Points Counting  on Week, Yields Collapsing.” CNBC, 28 Feb. 2020.