The coronavirus outbreak continues to hamper activity in China and the surrounding region as the economy remains shuttered. Plus, some of America’s largest corporations are beginning to feel the pinch from the situation. Nearly 72,000 people infected worldwide with most of them being in mainland China. The current death toll is close to 2,000. However, over the weekend, France reported the death of a Chinese citizen within the country.
Other reports include hundreds of people on a quarantined ship near Japan have the deadly illness. Deaths and infections continue to climb in the world’s second-largest economy and beyond. Markets faced disturbance by the news that Apple (AAPL) would miss revenue estimates for the first quarter of 2020.
Apple recently said in a statement, “While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated,” The outbreak has forced many companies including Apple to close down Chinese operations, and the country’s integral role in the global supply chain is creating issues for the iPhone maker, and undercutting other major multinational organizations.
Lockwood Advisors CIO Matthew Forester told Yahoo Finance the virus is now starting to exert more influence over analysts’ outlooks.
However, there are hopeful signs that the outbreak of coronavirus will wear off, amid comparatively fewer new cases in the reports. Walmart (WMT) also cautioned that the mystery virus may pose a downside risk to its upcoming quarterly results as well. On Tuesday, the big-box retailer reported that the short holiday season disrupted the earnings. This dragged on its stock price. For now, most local economists expect the coronavirus’s impact on the U.S. to remain contained to an extent. The Empire State Manufacturing Survey on Tuesday said the damage from the virus is under control. Full containment will compensate for the damage of the outbreak. Still, with China showing no signs of returning to normal anytime soon, fears are growing for the global economy as they should be.
Germany and Japan both cited the outbreak as the primary reason for the slowdown in their economies. Moreover, stocks tumbled anew on Tuesday. Apple’s warning scared investors and served as a reminder of the global economy’s interconnected nature.
“We are a global economy,” Kevin Simpson, Capital Wealth Planning founder and CEO, told Yahoo Finance Tuesday. “It’s naive to think it won’t have a global impact.”
What’s Happening Around the World
American citizens from the cruise ship, ’The Diamond Princess’, that was in quarantine in Japan and reported more than 500 cases of the virus, are being brought home as fears of the potential spread remain. In France, where the country reported its first coronavirus-related death, the new health minister issued a fearful warning that the virus could mutate into a global pandemic, an outcome that the World Health Organization has attempted to contain. Meanwhile, those in Hubei province and mainland China at-large are seeing the effect on food supplies as the quarantine continues to be in effect. Factories have slowly started to come back on the mainland, including Tesla’s giga-factory, but are unlikely to return to full speed.