Well we've all seen the news by now..
Global stock markets posted their steepest falls since the 2008 financial crisis on Monday after a crash in the oil price amplified concerns about the escalating economic cost of the coronavirus outbreak.
Almost £125bn was wiped off the value of the FTSE 100 in the fifth-worst day in history for the index of leading UK company shares, as it plummeted by 7.7% to finish the day below 6,000 points, its lowest level since straight after the Brexit vote in 2016.
Trading on Wall Street was frozen within minutes of the market opening as the system to buy and sell shares failed to keep pace with events. The Dow Jones closed down by more than 2,000 points for the first time ever, a decline of 7.8%.
Stock markets fell across Europe with losses in France, Germany and Spain of about 8%, outstripping the depths of the eurozone sovereign debt crisis. The biggest sell-off came in Italy, with stocks in Milan collapsing by more than 11%.
The global stock market correction – of a scale last seen in the weeks after Lehman Brothers’ collapse in 2008, which triggered the worst global recession since the Great Depression of the 1930s – comes amid an increasingly bitter standoff between Saudi Arabia and Russia over oil production cuts as the coronavirus outbreak drags down international demand for crude.
Frankly it's been a long time in the post, I was really wondering how the stock market seemed so calm given China essentially shut down for a month.
So, how will this play out, how should governments respond, is the world going to collapse into anarchy..
Anything related to travel and tourism, regardless of this crash, is going to suck and suck hard for a while. Airlines, hotels, destinations, conventions, restaurants.. the list goes on. Property should also see a correction given people are going out less. You'd think e-commerce would see a huge boost but that hasn't really been the case in China for example. Automotive will be hit hard, in China sales dropped 90% y-o-y for example.
In addition, how will you be affected. Personally I should be fine, my business is relatively recession-proof but that's not going to be the case for everyone.
May the wolves of NSG economists be let loose!
