Although the investment world continues to assess the long-term impact of the coronavirus (formally known as COVID-19), the obvious short-term impact has been a decline in stock prices, oil prices and bond yields.
The virus has spread well beyond the borders of China and the Far East, with nearly 30 countries outside of China reporting confirmed cases of COVID-19, including the U.S., western Europe, Iran, and Latin America.
Manufacturing firms feel the hurt
Beyond the investment markets, we’ve seen the epidemic affect businesses well beyond China. Supply chain disruption is among the chief concerns. Many suppliers of goods for both end-products and components of production systems are based in China and the Far East. As a result, companies in the United States and abroad are finding it increasingly difficult to source inventory or parts necessary to manufacture their products:
- Apple recently announced that production and supply of its products are being constrained and sales have fallen sharply, particularly in China.
- More than a third of S&P 500 companies have reported the potential for some impact from the COVID-19 virus on the outlook for 2020, indicating that the specific impact is too difficult to quantify until greater clarity on the extent of the epidemic can be defined.