With new coronavirus cases being reported daily — and more infections outside of China, where the disease first started — massive selloffs continue to rattle the world’s financial markets, and many companies predict the outbreak threatens the year’s earnings.
Yesterday, the Dow fell 1,190 points, or 4.4 percent, its largest point decline in a single session. The S&P and Nasdaq had similar drop-offs, losing 4.4 and 4.6 percent, respectively.
In addition to the virus’ effects on the world financial markets, Wall Street is poised for another disappointing day. If the pattern continues, the S&P 500 will see its worst week since the 2008 financial crisis, according to published reports.
In a business that relies heavily on a supply chain from China, as well as discretionary spending by baby boomers — the largest segment of boat buyers during the last decade — the coronavirus could have deep repercussions on every segment of the boat industry.
“It certainly has an impact on the distribution business in many ways,” Mike Connors, president of Land ‘N’ Sea told Trade Only Today. “The key issues are the inability to get products on orders that have already been placed and expected to have already shipped. The second challenge we see is the factories in China being closed resulting in the inability to continue production for future orders.”
West Marine CEO Ken Seipel told Trade Only Today that products that would normally be on store shelves are held up in Asian ports.
Global forecaster Oxford Economics warned that the spread of the virus to regions outside Asia
would stall global growth this year and could could cost global economy $1.1 trillion in lost income.
“Rapid spread of the coronavirus will weaken China’s growth sharply in the short term, causing global disruption. While there were signs in early 2020 that the worst was over for world trade and manufacturing, that optimism has been dashed by the outbreak,” the forecaster said in its February/March outlook report.
Signs point to an economic slowdown, as companies and individuals will spend less in the wake of the selloffs.