The impact of the deadly coronavirus, which has been a matter of concern for the global market since the beginning of the year, has started to be felt in the United States as equity markets faced a historic loss of more than $3.18 trillion in market value in just a week.
According to the S&P Dow Jones Indices, equity benchmark lost $203 billion in value on Friday, adding to its $2.997 trillion loss from Monday to Thursday, said Senior Index Analyst Howard Silverblatt. The S&P 500 index has lost $3.58 trillion in value from its February 19 high.
Analysts have seen a massive investor exodus away from riskier assets creating a bigger crater in all major averages since Monday. All three major average ended the week deep in correction territory, more than 10% off their most recent highs. The Dow Jones Industrial Average lost nearly 3,500 points since Monday.
On Thursday, the Dow Jones Industrial Average plummeted 1,190.95 points, or 4.4%, to close at 25,766.64. The S&P 500 slid 4.4% to 2,978.76 while the Nasdaq Composite dropped 4.6% to 8,566.48. The Dow had its worst day since February 2018 while the Nasdaq and S&P 500 posted its biggest one-day loss since August 2011.
WHO raises coronavirus threat assessment to the highest level
Fears even intensified after the World Health Organization raised its threat assessment of the COVID-19 outbreak to “very high,” the highest pandemic rating the organization gives to emerging global outbreaks.
“We are on the highest level of alert or highest level of risk assessment in terms of spread and terms of impact,” said Dr. Mike Ryan, executive director of WHO’s health emergency program. The group isn’t trying to alarm or scare people, he said. “This is a reality check for every government on the planet: Wake up. Get ready. This virus may be on its way, and you need to be ready. You have a duty to your citizens; you have a duty to the world to be ready.”
The disease, which originated in Wuhan, China, has now killed more than 2,800 people worldwide and infected more than 80,000. While the World Health Organization reported that the spread of cases in China is slowing down, the outbreak has jumped in South Korea, Japan, Italy, and Iran.
Economists’ predictions appear to be right
Many economists and market analysts have already predicted that the spread of the deadly virus could be one of the biggest threats to the global economy. In an earlier statement, the International Monetary Fund (IMF) head, Kristalina Georgieva, warns that the COVID-19 outbreak is the most pressing economic uncertainty that the world is facing right now.
Georgieva’s statements echoed earlier predictions regarding the possible impact of the coronavirus outbreak on global economies.
“The coronavirus is the No. 1 threat to financial markets currently as global investors are becoming jittery on the uncertainty,” said Nigel Green, the founder of the investment group deVere Group, back in January.