The last time we checked in on the Coronavirus, it had just started to spread beyond China. Unfortunately, any hope that the outbreak might blow over is ended as the virus continues to infect new victims across the globe. As cities–or entire countries, in the case of Italy–go into lockdown, the outbreak is having a major impact on the global economy.
Several major annual events have been canceled because of the Coronavirus outbreak. South by Southwest (SXSW), a film and music festival in Austin, Texas, recently announced that they were canceling this year’s event.
The Indian Wells tennis tournament in Palm Springs, California, called things off the night before it was set to begin, leaving players and fans alike at a loss.
Depending on whether health officials can get a handle on the outbreak before the end of May, it’s entirely possible that the Olympics will be canceled or postponed, too. The Summer Olympics are set to begin in Tokyo on July 14, but that’s looking increasingly unlikely the more we learn about this disease.
Aviation is one of the industries most strongly impacted by the Coronavirus outbreak. No one wants to travel right now if they can help it, and airlines are seeing way too many empty seats.
American Airlines plans to cut up to 10% of its domestic and international flights as a cost-saving measure. Delta will go even further, cutting up to 25% of international flights and 15% of domestic.
According to CNN, Delta will take drastic cost-saving measures such as withholding contributions to the company pension plans and holding off on aircraft maintenance. CEO Ed Bastian warned, “Should the environment get worse, we can go deeper.”
Meanwhile, Southwest Airlines CEO Gary Kelly offered to take a 10% pay cut. The airline is also considering whether it needs to cut flights in order to cope with the economic crisis.
The Dow went into freefall, losing 2000 points on Monday. That was partially due to the oil war between Saudi Arabia and Russia, but the Coronavirus also played a major role.
Massive selloffs spiked by Coronavirus fears led to the Dow dropping 7.8%. Similar drops in other markets (S&P, Nasdaq) made for the worst day on the stock market since 2008.
Experts warn that the slight recovery seen today is nothing but a “dead cat bounce,” or a minor rebound that is not sustainable. President Trump has proposed a payroll tax cut that could help mitigate the damage, but it remains to be seen how much worse the global economy will get as the epidemic spreads.