Stocks Fall Despite Financial Assurances for Coronavirus

With investors being more persuaded by coronavirus fears than stimulus efforts, European stocks and U.S. futures dropped on Thursday. As the outbreak has forced workers and consumers to stay at home to avoid the further spreading of the disease, businesses and supply chains have been disrupted. Consumer demand got weaker as well. According to Business Insider, “As a result, coronavirus threatens to slash global economic growth this year.”

Business Insider reported that in the U.S., Federal Reserve “made a surprise cut to interest rates and the House of Representatives approved $8 billion in emergency funding.” Reuters reported that “Chinese governments at all levels have allocated funds of 110.48 billion yuan ($16 billion) to fight the coronavirus outbreak.” The International Monetary Fund allocated $50 billion to support affected countries.

Stocks fall on Wall Street amid coronavirus fears, putting market on track for worst week since 2008 Stocks fall on Wall Street amid coronavirus fears, putting market on track for worst week since 2008 pic.twitter.com/LIZKKNgiwh

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However, even with these assurances, stocks slid on Thursday. “Investors have stopped backing riskier assets once again as they lose their optimistic side regarding the coordinated action of central banks around the globe,” Naeem Aslam, chief market analyst at AvaTrade, said.

“Is anyone going to go to cinemas, theaters, pubs, restaurants, parties, festivals, hotels, conventions, sports events, etc., if this virus continues to spread?” Michael Every, senior Asia-Pacific strategist, asked in a research note.