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Coronavirus impact on global and local economy

Posted at 6:26 PM, Feb 24, 2020
and last updated 2020-02-24 18:26:21-05

LEE COUNTY, Fla. — The Dow Jones Industrial Average closed Monday down by more than 1,000 points.

Finance Professor Tom Smythe at Florida Gulf Coast University said some investors are pulling out, fearing they’ll lose profits while industrial workers overseas are quarantined because of the virus.

“Workers aren’t able to work, therefore they’re not getting paid, and also not producing goods,” he said.

The coronavirus is already affecting cities in Northern Italy, turning many areas into ghost towns. More than 200 people there have tested positive for coronavirus.

There’s a growing number of cases in South Korea, too. Cases in both countries are demanding mandatory quarantines. Both Italy and South Korea were in the front of the global stock market declines Monday by as much as five percent.

Smythe said this virus is affecting American investors.

“Their profits are likely going to lower through the first quarter of this year,” he said.

And that affects retirees living here.

“By definition it’s going to impact retirement accounts. But you don’t want to go out and start selling. That’ll just make the problem worse,” he said.

He said it may be a good idea to buy stocks while prices are down, but it’s too early to tell.

Smythe added it’ll take time but the market will recover.

“Even if we continue to see some correction in the market, we’ll come back,” he said.

He also said consumers may face product shortages in the near future. But, it depends on if there are more outbreaks, how long quarantines last and how long it takes to get businesses back up and running.