What causes panic in the markets: loss of companies
The coronavirus epidemic has caused widespread damage around the world. Not only the global economy is suffering, the profits of rich people are decreasing. Around ten billionaires lost $83 billion a week after stock market quotes collapsed. Interestingly, there was not a single businessman from Asia among those who had lost their income.
As experts note, the end of February was the worst time for the stock exchanges around the world. The spread of coronavirus and the panic associated with it led to the beginning of the global financial crisis. Losses are observed not only in billionaires, companies lose hundreds million of dollars daily.
According to the data, today about 87 thousand people are infected, the number of deaths is about 3 thousand and it continues to grow. Initially, the virus was rampant in China, which slowed down the development of the local economy, many countries have reduced supplies to China, and the production volume of the largest market has decreased. Then the epidemic spread beyond China, and a real panic broke out. All stock exchanges began to massively dispose of stocks for fear of an even greater drop in their value. As a result, important indices fell sharply, for example, Shanghai Composite fell by 5.2%, while Euro Stoxx 50 fell by 12.4%. The Dow Jones index lost 12% or 3500 points over the week on American exchanges. This situation has become the most difficult since the crisis in 2008. In just one day Dow Jones fell by 1200 points, which is a record-breaking drop in the index’s history.
Deterioration has also affected the wealthiest people on the planet. Jeff Bezos, who ranks first in Forbes in terms of capital, his fortune fell by $14.1 billion during the week. He now has about $113.6 billion.
China, where almost all the world’s production is concentrated, is massively closing factories, and companies in different countries are already thinking about how to cover losses. The Amazon Corporation is developing options on how to provide the right amount of goods in anticipation of the annual sale, which will be held in July. At the same time, many companies are having problems with the supply of products from China.
Warren Buffett’s capital has also decreased, he has become poorer by $9.8 billion. However, the businessman does not lose optimism and says that now it is quite profitable to invest, but considering the prospects of the project for a long time.
Several years in a row the Tesla car concern showed excellent results. At the beginning of the year he managed to overtake Volkswagen, having significantly increased its market value. However, Elon Musk felt the influence of coronavirus – his condition amounted to $34.7 billion, dropping by almost $ 9 billion.