Dwindling travel, slowing growth, and impacts on trade: How the coronovirus outbreak that has killed 131 could wreck the global economy as investors fear it will be a ‘black swan event’
Coronavirus outbreak could have widespread economic impact if it spreads
China accounts for 16% of global GDP and a slowdown there could hurt
Already severe impacts have been felt in the travel and tourism industries
Supply chains could be disrupted if the outbreak worsens in China
Starbucks expects hit from coronavirus after closing half of China stores
Apple widens revenue guidance range because of uncertainty due to outbreak
By KEITH GRIFFITH
DAILYMAIL.COM
29 January 2020
Fears are mounting that the coronavirus outbreak could wreak economic havoc worldwide.
Even if the deadly virus doesn’t spread significantly outside of China, the potential economic ripple effects could be profound — the type of unexpected calamity known as a ‘black swan event’.
China itself makes up 16 percent of global GDP, and an economic slowdown there amid mass quarantines could quickly impact global supply chains and international trade.
On Tuesday, Starbucks became the first major U.S. company to signal a hit from the outbreak, as it temporarily closed more than half of its 4,300 stores in China and adjusted operating hours in others.
The world’s largest coffee chain said it would update its 2020 forecast when it is able to reasonably estimate the impact of the outbreak, which has caused over 100 deaths in China.
Apple, which relies on China as both a lucrative market and a major production base, also sounded a note of caution on Tuesday, issuing a a wider-than-normal prediction range on revenue forecasts because of the uncertainty created by the coronavirus outbreak.
Although U.S. stocks rebounded on Tuesday after no new confirmed cases were announced in America, the Treasury yield curve, measured by the gap between yields on three-month and 10-year bonds, briefly inverted for the first time since October, signaling investor worries.
Travel and tourism industries have already been hit heavily, with United Airlines suspending flights between the U.S. and three Chinese cities.
The airline said in a statement that ‘significant decline in demand’ has forced it to suspend flights from February 1 though February 8 between its US hubs and Beijing, Hong Kong and Shanghai.
The Rest…HERE
