Squeaky bum time!

Thrugelmir

green_man said:

It depends very much on how long before the major markets (Europe, USA, Japan, China) see an improvement in the contagion rates.  
A prolonged period could have grave long term effects and it would be likely that a large number of businesses would end up folding, especially those service industry’s that rely on consistent daily footfall (Airlines, travel companies, retail, restaurants etc etc), this could easily lead to a global recession, low interest rates, widespread job losses etc.

A shorter period should be fairly quickly recovered from.  Crystal Ball time

May result in a major rethink longer term. Fragility of global supply chains for example. Coupled to Green issues that dominate the news. Europe as a whole is dependent upon service industries. Something that maybe severely exposed in the months ahead. 

NedS

Given how quickly markets have dropped (FTSE100 down 30%), and that the CV situation is likely to get worse over the next couple weeks before it gets any better, I'd say the chances of finding any support in the market at current levels is slim. Next leg down probably takes us towards a 40% drop (FTSE100 at ~4600) and on to below 4000 for a 50% drop. The question then becomes are those levels oversold and can markets recover relatively quickly, or will CV push the global economy into recession at which point it could become very protracted. At what price is a recession priced in? Time will tell on the recession front as we will need to see company earnings over the next 6 months or so before we can truly start to gauge the longer term impact. We may see a short term bounce once the CV numbers start to stabilise/fall, and then further drops should poor earnings figures materialise.

badmemory

What would happen if they had to close the stock exchanges down?

Username999

They did for 9/11.

ratechaser

m_c_s said:

A lot depends on how the US reacts from a fiscal perspective. Ofcourse it is a medical issue but the markets are pricing in recession and at the moment it is not known whether it will be a wide spread deep global recession or just a significant drop in global growth. The US fiscal stimulus is still being agreed between Trump and Pelosi but its size will most likely be enormous -possibly trillions of $s. That may stabilise the markets somewhat but clearly won't change the medical situation. 

$1.5 trillion in measures and it's barely had an impact. Maybe trump should have just handed it out in tax cuts, might have had more effect in improving his re-election hopes right now...

m_c_s

ratechaser said:

m_c_s said:

A lot depends on how the US reacts from a fiscal perspective. Ofcourse it is a medical issue but the markets are pricing in recession and at the moment it is not known whether it will be a wide spread deep global recession or just a significant drop in global growth. The US fiscal stimulus is still being agreed between Trump and Pelosi but its size will most likely be enormous -possibly trillions of $s. That may stabilise the markets somewhat but clearly won't change the medical situation. 

$1.5 trillion in measures and it's barely had an impact. Maybe trump should have just handed it out in tax cuts, might have had more effect in improving his re-election hopes right now...

This is only part of the stimulus. Trump and Pelosi have not agreed on the major part yet. Will probably be a few trillion $s which may include more tax cuts.
Trump may use Presidential national emergency powers to bypass congress anyway in which case it will be tax cuts a plenty.

DairyQueen

NedS said:

 or will CV push the global economy into recession 

Are you seriously in any doubt? This is going to be a real humdinger of a recession (no crystal ball required).

Sunnylifeover50plan

I wonder how mortgage lending will go - maybe larger deposits & more stringent affordability tests if lending against a falling asset class. I know this is a pension part of the forum but seems likely we will see a re-balancing across a wide spectrum of assets held, as is common with a global recession.
Safe havens for wealth, in whatever form, are going to be hard to find. If we saw a 10-20% fall in house prices that's going to start a whole new storm.

[Deleted User]

This is new territory. Nobody knows what will happen to the real economy as a result of a viral infection on this scale (or the countermeasures which are the actual source of economic hazard). This could all be over within a month or we could see some serious long term harm with social and economic consequences and mass unemployment.

Not obvious how fiscal measures can help

Thrugelmir

Deleted_User said:

This is new territory. Nobody knows what will happen to the real economy as a result of a viral infection on this scale (or the countermeasures which are the actual source of economic hazard). This could all be over within a month or we could see some serious long term harm with social and economic consequences and mass unemployment.

Not obvious how fiscal measures can help

No one is forecasting that it'll be over in a month. At least from a UK perspective.