21 March 2020
Coronavirus drives fastest bear market ever
What has happened?
Markets sold off on Thursday as investors priced in the view that the intensity and duration of COVID-19’s economic impact will be worse than expected, but is also still not fully known. This is the result of several factors:
US President Donald Trump announced a 30-day travel ban on citizens from 26 European countries. Italy’s government ordered shops to be closed until 25 March, excluding grocery stores and pharmacies. The UK also moved from the containment to delay phase of managing the outbreak. For many Americans, it was notable that the actor Tom Hanks tested positive for the virus, and the National Basketball Association cancelled the rest of its season. As the economic impact widens, investors’ hopes for “enough” government stimulus are growing. Yet those hopes are turning into a realisation that it is apparently a lot harder to provide economic support to people and businesses in Western democracies than it is in China.