Stability in Unstable Times

With the recent outbreak of the Coronavirus now having cases across Asia, the Middle East and Europe, financial and international markets are already seeing negative effects. Wuhan, the centre of the outbreak, and other cities in the province, are currently on lockdown, however as China being the world’s largest economy and leading in trading, the vast spread of the virus has had direct effects on trading and stocks.

This epidemic circulating outside of China has meant that people either can’t or don’t want to travel, global stocks are on a decline, and manufacturing supply chains are seeing a decrease in demand. Major airlines such as American Airlines, Delta, and FedEx have seen drops in stocks of more than 5%, and the oil industry is having the biggest shock to demand since the 2008 financial crisis due to China being one of the biggest importers. Many other aspects such as the tourism industries and the pharmaceutical companies in China have also experienced disruption due to the spreading virus. However emerging markets have grown, new investor opportunities such as in food delivery companies are high, and the demand for safe haven assets have risen.

In the midst of this crisis, financial hubs around the world such as Singapore and Hong Kong according to news outlets are experiencing empty airports, a lack in consumer demand, and companies, employees and small businesses being on edge. London as the second most financial city in the world after New York, ranked by the Global financial centres Index (GFCI), has 36 confirmed cases as of the 1st Marck, all who are under isolation. Public Health England have stood by their statements after fear from companies that there is no need for workplaces to close, as most possible cases are negative, and the current risk to the UK population is low to moderate.

The United Kingdom remains being consistently ranked as having one of the best health care systems in the world, and London remains stable in the current unstable international market, with most affects to stocks and trading from the coronavirus being known to be temporary, and at worst the shutdown of economic activity will be restricted to certain parts of the economy rather than affecting it at a whole.