As coronavirus shows its ability to spread beyond every attempt to contain it, it continues to affect the economy around the world. China has begun to allow some companies to open for business, which is apt to help manufacturing. Despite this positive movement, it is beginning to appear that the slowdown on manufacturing is going to last longer than expected.
New Coronavirus Totals
Yesterday, China revised the number of people who have been confirmed with the virus. They did this by adding people that were diagnosed with a CT scan after Feb. 5th. They admit that there were not enough of the standard tests so the results of the new method were added. This resulted in a jump of about 15,000 cases, now coming to a total of 60,329. The death total was also raised, now over 1,500. Some researchers believe that this new number still falls far short of what the real numbers may be – possibly 100,000 higher.
Effect on Manufacturing
The concern continues to be about how far and wide coronavirus is going to spread. It remains largely confined to China, but the toll is still rising. Japan now has 203 cases and most of them are from the cruise ship Diamond Princess.
Since China produces most of the world’s exported goods, the longer that the virus continues to slow manufacturing and shipping, the more the market will be impacted. Up until these new results were revealed, it was starting to appear like coronavirus was peaking. The new numbers are a shock to the stock market today, but the results are apt to be seen soon.
The CEO of the Alibaba Group in China, Daniel Zhang, has called the current situation a “black swan event.” Even though some employees have returned to work, he said that it is not enough to resume shipping the products that are being made. He also noticed a strong rise in online ordering because of the quarantines and people being less willing to go to the stores and possibly be exposed to the virus.
The car market in China has seriously been affected by the quarantines and fear of getting the disease. Nissan’s operating profit had dropped by 83% during the last quarter, but it has been dropping throughout the entire year. It is looking to restart its plants on Feb. 17 but it may have a shortage of parts.
The Stock Market Is Seeing Some Losses
The market showed a strong gain at first, with all sectors showing gains, except for Energy Minerals, which had a decline of 7.13%. Consumer Durables showed the highest gains with an increase of 32.83%.
Near the end of the day, Dow Jones was down 125.47 points or 0.42%. Nasdaq was lower by 16.49 points or 0.17%, and S&P was down 6.76 points or 0.20%. The markets can expect to continue to be greatly impacted by the effects of coronavirus until it is contained.
Even though coronavirus has changed a lot of things, small businesses still appear to be optimistic about the economy. They believe that because they are seeing new customers and because people are still in the mood for buying. Even though they are hoping for the economy to stay healthy, many are also trying to make sure they are ready for a downturn – if it should come.
The Fed continues to closely watch the markets. The Federal Reserve Chairman, Jerome Powell, did not change the interest rates. He feels that the U.S. market is doing well enough to leave it alone – for now. Job growth looks strong, he said, and spending appears to be at a good rate.