The Dow Jones index, a key indicator of the American stock market, plunged more than 600 points on the opening today, immediately trending lower. A half hour into trading, it’s down about 800 points. This is capping out a week of wild swings which saw the two largest single-day point increases in history and two of the ten largest single-day point decreases in history.
It also follows the previous week which recorded the largest weekly point drop.
The Japanese NIKKEI has dropped from an average of around 24,000 points to about 21,000 over the past month. Similar responses have been seen in other Asian markets as well as markets in Europe, Africa and South America.
The effects of the novel coronavirus, covid-19, are being felt throughout the world with school closings in places as distant as Japan and Italy, more than a dozen countries now reporting infections and deaths, and the discovery this week of a mutated, more aggressive strain. The effects beyond those related to immediate medical response are also putting pressure on the markets. The global economy was already in a slowing trend; reduced travel, supply chain disruptions, and human resource reductions due to illness and child care associated with the disease are all expected to have dire effects on sustained growth, and therefore monetary return.
Governmental, social, and business responses will be key in determining the extent of damage the illness is able to inflict upon any given nation. Currently, it is increasing the animus between South Korea and Japan, which were already at odds regarding economic and social issues dating back to the era of World War II. It has yet to be determined what the American response will be, and this appears to be roiling and disappointing the markets.