As the fear, psychology and change in customer behavior takes deeper hold due to Corona Virus affecting Travel, Leisure and other industries, I think Impact on Economy and Stock Market could be more than I initially anticipated.
It is a fact that regular flu (Influenza Virus) will kill multiple times more people than Corona Virus, it also seems to be the case that human behavior to first one is ignorance but to the second one is fear. If this behavior of people cancelling vacations, business conferences, events at entertainment and sports venues continues there will be job losses in these sectors. The cutting of interest rates by US Fed to 0% is also stoking more fear in the market as long term bond yields fall with US 10 year at 0.8% and 30 year below 1.5% the stock market could tumble further down making new lows than Feb last week low of 2820 on S&P.
Time to hold on to your assets and ride out the turbulence in the markets that could last a while.
Contagion from fear will likely affects all sectors of the economy unless sentiment turns. Irony will be that it won’t be the Corona Virus that causes the recession but the human reaction and psychology to it that might.
