We pay for the coronavirus through our wallets

At the beginning of the year, world economic growth received an unexpected enemy in the form of a dangerous coronavirus. It has already paralyzed the 11-million-strong city of Wuhan in China and is spreading rapidly throughout Hubei Province. According to financial investors, the disease has the potential to limit industrial and agricultural production worldwide.

coronavirus, stock exchanges, markets

VIDEO: Bratislava Airport advises passengers on how to proceed coronavirus to behave prudently.

“The stock market has realized that the coronavirus in China will be significant impact on the economy and various preventive restrictions will affect up to 56 million people, ”said Saxo Bank stock analyst Peter Garnry. He points out that China has already banned its people from traveling and in big cities she closed the school.

Any reduction in production will automatically slow down economic growth Asia’s largest economy, which has been the engine of the world for many years economic growth. Just last year’s slowdown caused by China trade war with the United States was worse results of the Slovak economy.

Due to fears of a slowdown in China’s economic growth, stocks are falling French luxury goods manufacturers LVMH, Hermés and Kering. The current success of these companies depends to a large extent on sales of goods in Asia. Beijing has been number one in imports for many years minerals. The ever-growing demand may stop this year restriction of industrial production. Some Chinese factories for a high number infected people must limit production changes. On the world financial therefore, mining shares are also falling sharply these days companies.

The short fall of European stocks

“If the epidemic became a long-term problem, it would also affect global demand for fuels because it would change the way people po all over the world they go to work, travel and vacation, “he warned Saxo Bank commodity analyst Ole Hansen. To stop the spread of the disease should be namely, he limited contact with other people as much as possible and would suffer significantly mainly tourism. So far, the spread of coronavirus has only decreased stock markets, which began to fall in Asia last Friday and America. The European continent and, for example, the German continent also joined on Monday the DAX index fell by 2.74 percent, the French CAC by 2.68 percent and the British FTSE by 2.29 percent. On the same day, the major US index was the Dow Jones fell 1.57 percent and the Japanese Nikkei 2.03 percent.

Already on Tuesday, the situation calmed down and at the time of the deadline for the publication of the newspaper True, all European actions grew. Specifically, the German DAX has risen by 0.3 percent, the French CAC by 0.74 percent and the British FTSE by 0.48 percent. The development of oil prices reacted similarly when European oil Brent lost 2.26 percent of its value on Monday and on Tuesday it grew again by 0.5 percent. On the contrary, in times of maximum panic managed to strengthen gold by 0.67 percent and fell on Tuesday by 0.3 percent.

Unnecessary panic?

Some economists consider the current stock market crashes to be exaggerated. “The new coronavirus, which is spreading from China, has Currently known data on the conscience of so far dozens of dead and thousands infected. The mortality rate is almost three percent. That, by the way, corresponds roughly to mortality from measles, “said the Czech economist a director of Next Finance Markéta Šichtařová. Between the two diseases is the biggest difference in that they die of measles most often children and the coronavirus again seniors.

Compared to the common flu, it dies of approximately coronavirus three times more people. “Plus, we have to take into account the fact that newly discovered viruses have the property that their mortality decreases over time as they mutate. It is basically in the interest of the virus to his victim lived for as long as possible, because the easier and better he got the virus is spreading, “said Šichtařová. From this point of view, according to the economist the current behavior of financial markets irrationally.

European financial markets have not only been scared off in recent days from coronavirus, but also from bad macroeconomic numbers. Famous German the IFO index fell from 96.3 points in December to 95.9 points in January. “The reason for the decline is the pessimistic view of German companies on economic development in the coming months, “said Clemens Fuest, President of the German Economic Institute IFO. It is the IFO index that can very well predict the future development of Europe’s strongest economy, which will slow down again in the coming months. In German the economy is also tied to Slovakia.

At the beginning of the year, world economic growth received an unexpected enemy in the form of a dangerous coronavirus. It has already paralyzed the 11-million-strong city of Wuhan in China and is spreading rapidly throughout Hubei Province. According to financial investors, the disease has the potential to limit industrial and agricultural production worldwide.

coronavirus, stock exchanges, markets

VIDEO: Bratislava Airport advises passengers on how to proceed coronavirus to behave prudently.

“The stock market has realized that the coronavirus in China will be significant impact on the economy and various preventive restrictions will affect up to 56 million people, ”said Saxo Bank stock analyst Peter Garnry. He points out that China has already banned its people from traveling and in big cities she closed the school.

Any reduction in production will automatically slow down economic growth Asia’s largest economy, which has been the engine of the world for many years economic growth. Just last year’s slowdown caused by China trade war with the United States was worse results of the Slovak economy.

Due to fears of a slowdown in China’s economic growth, stocks are falling French luxury goods manufacturers LVMH, Hermés and Kering. The current success of these companies depends to a large extent on sales of goods in Asia. Beijing has been number one in imports for many years minerals. The ever-growing demand may stop this year restriction of industrial production. Some Chinese factories for a high number infected people must limit production changes. On the world financial therefore, mining shares are also falling sharply these days companies.

The short fall of European stocks

“If the epidemic became a long-term problem, it would also affect global demand for fuels because it would change the way people po all over the world they go to work, travel and vacation, “he warned Saxo Bank commodity analyst Ole Hansen. To stop the spread of the disease should be namely, he limited contact with other people as much as possible and would suffer significantly mainly tourism. So far, the spread of coronavirus has only decreased stock markets, which began to fall in Asia last Friday and America. The European continent and, for example, the German continent also joined on Monday the DAX index fell by 2.74 percent, the French CAC by 2.68 percent and the British FTSE by 2.29 percent. On the same day, the major US index was the Dow Jones fell 1.57 percent and the Japanese Nikkei 2.03 percent.

Already on Tuesday, the situation calmed down and at the time of the deadline for the publication of the newspaper True, all European actions grew. Specifically, the German DAX has risen by 0.3 percent, the French CAC by 0.74 percent and the British FTSE by 0.48 percent. The development of oil prices reacted similarly when European oil Brent lost 2.26 percent of its value on Monday and on Tuesday it grew again by 0.5 percent. On the contrary, in times of maximum panic managed to strengthen gold by 0.67 percent and fell on Tuesday by 0.3 percent.

Unnecessary panic?

Some economists consider the current stock market crashes to be exaggerated. “The new coronavirus, which is spreading from China, has Currently known data on the conscience of so far dozens of dead and thousands infected. The mortality rate is almost three percent. That, by the way, corresponds roughly to mortality from measles, “said the Czech economist a director of Next Finance Markéta Šichtařová. Between the two diseases is the biggest difference in that they die of measles most often children and the coronavirus again seniors.

Compared to the common flu, it dies of approximately coronavirus three times more people. “Plus, we have to take into account the fact that newly discovered viruses have the property that their mortality decreases over time as they mutate. It is basically in the interest of the virus to his victim lived for as long as possible, because the easier and better he got the virus is spreading, “said Šichtařová. From this point of view, according to the economist the current behavior of financial markets irrationally.

European financial markets have not only been scared off in recent days from coronavirus, but also from bad macroeconomic numbers. Famous German the IFO index fell from 96.3 points in December to 95.9 points in January. “The reason for the decline is the pessimistic view of German companies on economic development in the coming months, “said Clemens Fuest, President of the German Economic Institute IFO. It is the IFO index that can very well predict the future development of Europe’s strongest economy, which will slow down again in the coming months. In German the economy is also tied to Slovakia.