On Thursday, the World Health Organization declared a public health emergency, after declining to do so the previous week. The pneumonia-like virus has infected more than 9,800 people in China and killed 213 and is spreading overseas. The national Centers for Disease Control and Prevention reported the first person-to-person transmission of the virus in the United States, as the husband of a woman who contracted the virus in Wuhan was diagnosed with the illness. The United Kingdom and Russia both reported their first cases Friday.
The deadly virus presents a huge threat to the global economy, as it paralyzes China’s workforce and dampens its powerful manufacturing industry. It is forcing global firms with roots in the country to freeze operations and seek ways to reorient supply chains.
“There is a growing recognition that the coronavirus contagion is worsening, with more travel restrictions and the number of infected already exceeding the total infected by SARS,” said Kristina Hooper, chief global market strategist for Invesco.
From an economic perspective, the outbreak’s timing is especially punishing, dragging down growth prospects and taking a bite out of corporate earnings just when investors had hoped for a boost after the truce in the U.S.-China trade war. The big U.S. energy companies, already hit by low oil prices due to oversupply, were the biggest drags on the Dow Jones industrial average Friday. Exxon Mobil and Chevron were down more than 3 percent each after reporting disappointing earnings on Friday. Oil prices are expected to decline further due to a slowdown in demand from the economic implications of the coronavirus.