Economical Changes Witnessed After Coronavirus

With the worldwide coronavirus pandemic, we are witnessing a lockdown in most cities with business operations being suspended – bringing in the work-from-home culture – and restricting all movements. This practice has led to a slowdown in all activities around the globe in many sectors, while dragging down the global economy.

Western firms are being affected the most, with stores and retail outlets being shut down. It has greatly reduced work opportunities. Additionally, companies selling consumer products have resulted in decreased revenue with factories being shut down. Such is the case of Apple’s reduced phone production inhibiting economic growth opportunities. Commodities like Brent crude oil have plummeted by 26% to 18 year low, while the supply-chain distribution of technology companies has witnessed a drastic fall by 6%.

The travel and tour sector, which is dependent on labor mobility, is facing a critical business decline as airlines and hotel business both reduce by 7%. However, medical technology is facing a constant rise and fall, especially in the biotechnology sector. All this contributes to the increased demand for supplies and vaccines for the treatment of this global threat while the pharmaceutical companies are under major stress to meet the demands.

The Stimulus Bill signed by U.S. President Donald Trump, along with unprecedented policy easing by the Federal Reserve, helped the S&P 500 stage a gain of 10.2% for the week, making its best week since 2009. However, the U.S. stock market benchmark is still down about 25% from its high in February.

In these testing times, we have witnessed Wall Street take a beating, halting its best three-day bounce in almost a century as number of cases of coronavirus skyrocketed. The jobless claims data also did not help as it surged to a record 3.3 million.

It will be interesting to see how the economy reacts to the increase in number of cases as early as next week when the financial markets open.