I know I sound dumb but how does a virus make the stock market drop?
- JudithLv 71 month ago
Many US companies rely on workers in China and other Asian countries for cheap labor. If those people can't work because of an illness (or any other reason for that matter), it impacts US companies. Products aren't being manufactured and/or shipped to the US. That means that US companies can't provide products to sell. And for some businesses that could destroy their company if it lasts long enough.
- StephenWeinsteinLv 71 month ago
The virus scares humans. The humans sell stock. Selling makes the market drop.
- oldprofLv 71 month ago
Simple, sick people can't go to work. And exposed people can't go to work for fear they are carrying the virus.
Without people to do the work, enterprises cannot produce their goods and services. And the market sees that and plunges because profits are no longer predicted.
And roughly 50% of the goods we receive from overseas come from China, the hardest hit of all the nations with COVID19.
- ?Lv 71 month ago
The stock market value reflects, in simple terms, the confidence if the average investor that things are going to be good in the foreseeable future. The reality is a bit more complicated, but, basically, if things look bad, the stock market drops.
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- MagmaladLv 41 month ago
- A HunchLv 71 month ago
Because goods might not be able to pass between countries.
- Coca-Cola announced there may be a shortage of some flavoring and sweeteners
- The Port of LA & Long Beach are not allowing crew off the ships (maybe others Ports too).
- The TaxpayerLv 71 month ago
you're not dumb. The media is selling it...fear makes them money. Bad news is what the DNC sells. Wait a little bit...it will bounce back.
- JohnLv 71 month ago
A friend of mine posted on Facebook this morning that she went to Costco yesterday. She said is was outright crowded and the shelves for bottled water and canned food were going bare. That's fine and dandy but there are 60 whole known cases of Covid-19 in all of America. What I'm saying is that some people tend to panic. It is also true that supply lines of all sorts are about to be disrupted and it's not just China. That means toys for Christmas won't be coming but also auto parts and machine tools and agriculture. So yes, there is a very real threat, economically. Some people also tend to panic.
- JLv 71 month ago
China's manufacturing industry supplies vital components and end products to many countries around the world. When the supply line fails, so do many businesses. The chances of a recession is now higher.
- Anonymous1 month ago
Supply chain disruptions for one. We can't get shipments from china. That means lower sales and lower profits.