Coinspeaker
Dow Jones Plunged 1000 Points as CDC Warns of Possible Coronavirus Outbreak

Things are clearly not looking good for the global markets as threats of a global coronavirus outbreak intensifies. On Thursday, the Dow Jones dropped 4.5% over 1000 points dragging down several bluechip stocks as well!

On Wednesday, the Centers for Disease Control and Prevention (CDC) raised warning on the potential possibility of a “community spread” of the Coronavirus in the United States.

The U.S. Health Officials gave this warning after the detection of the first coronavirus case in Northern California. Thus, the CDC has revised its guidelines allowing more clinicians to test suspected cases of carrying the COVID-19.

On Thursday, the California governor Gavin Newsom also confirmed that 33 people are tested positive and 8400 other suspected cases are currently being monitored. Speaking at a press conference, Newsom said:

“We are currently in deep partnership with CDC on one overriding protocol that drives our principle focus right now and that’s testing, and the importance to increase our testing protocols and to have point of contact diagnostic testing as our top priority not just in the state of California but I imagine all across the United States.”

In late January, California received its first flight of people evacuated from the Wuhan City of China. Note that Wuhan City is the epicenter of the coronavirus epidemic. Newsom explained:

“We coordinated those first flights, that first flight in particular, in January, late January down into Riverside at March. “Over 800 people have come in on those flights, but that’s a small part of the overall picture. Thousands and thousands of other people have come in on more traditional flights through the state of California.”

Soon after the CDC’s warning on Wednesday, Dow Jones and S&P 500 crashed for the fourth straight day. The market crash started earlier on Monday after Italy and South Korea reported the highest level of infected cases.

Dow Jones plunged for the fourth straight day on Thursday. Also, it turned out to be the fastest 10% drop in the history of the S&P 500. In less than a week, over $3 trillion in U.S. equities have been wiped out from the market.

The losses also intensified on Thursday as several blue-chip stocks. Apple Inc (NASDAQ: AAPL), Exxon Mobil Corporation (NYSE: XOM) and Intel Corporation (NASDAQ: INTC) plunged 6% each. Other technology stocks like AMN Healthcare Services Inc (NYSE: AMN) and Nvidia Corporation (NASDAQ: NVDA) dropped 7.3% and 5.6% respectively. Also, the airline stock took a massive hit.

United Airlines crashed at 2.4% while American airlines crashed at 7.7%. Other big companies have already started reporting disruptions in their operations due to the virus spread. Tech conglomerate Microsoft Corporation (NASDAQ: MSFT) has warned that it will miss guidelines on account of the coronavirus outbreak. In its Q2 earnings call, Microsoft said:

“Although we see strong Windows demand in line with our expectations, the supply chain is returning to normal operations at a slower pace than anticipated at the time of our Q2 earnings call. As a result, for the third quarter of fiscal year 2020, we do not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated.”

Other companies are also taking some cautious approaches and measures. Food giant Nestle SA (SWX: NESN) has asked employees to suspend business travel. Facebook Inc (NASDAQ: FB) also announced canceling the “in-person component” of its annual F8 developer conference. The F8 is Facebook’s biggest annual conference event.

David Kostin, Goldman Sachs chief U.S. equity strategist wrote a note to investors addressing their concerns. Kostin wrote:

“US companies will generate no earnings growth in 2020. Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity, and elevated business uncertainty.”

Willie Delwiche, investment strategist at Baird said:

“As this week’s selling has progressed, we have seen some evidence of increased caution on the part of investors. Investors are shifting away from excessive optimism but there is still little evidence of fear overwhelming complacency. Bottoms are typically processes punctuated by climactic events and seeing breadth indicators stabilize would be an encouraging sign that such a process is underway.”

Moody’s Analytics’ Mark Zandi in a research note said:

“The coronavirus has been a body blow to the Chinese economy, which now threatens to take out the entire global economy. A global recession is likely if COVID-19 becomes a pandemic, and the odds of that are uncomfortably high and rising with infections surging in Italy and Korea.”

So, only the time will show what will be the real influence of the current situation on teh future. However, at the moment it doesn’t look very optimistic.

Dow Jones Plunged 1000 Points as CDC Warns of Possible Coronavirus Outbreak

236 +