Today [March 9,2020] the financial markets finally recognized the economic damage the novel Coronavirus will cause.
The price war in the crude oil markets which Russia initiated did not cause today’s stock market fall but it also did not help. While cheap oil is supposed to be good for the economy the drop will also cause significant damage in the U.S. financial markets as the whole fracking industry in the United States is laden with debt and is now destined to be wiped out. Expect crude prices to sink to $20 per barrel as frantic overproduction and a drop in demand due to the virus coincide. Russia is well positioned to win this price war. Others are not.
It is the virus pandemic that causes the downturn in stock markets. But what makes the Sars-CoV-2 virus, as the novel Coronavirus is now officially known, so dangerous? The Covid-19 disease the virus causes is basically a flu though its seems to be one of the more severe kinds.
But it is a totally NEW kind of flu and that makes all the difference.