The odds of the coronavirus outbreak becoming a pandemic have jumped 40% recently. As nations struggle to contain this virus, it’s taking its toll on the markets too, wiping out $5 trillion.
Cases of the new coronavirus disease are rising quickly outside China, and the odds of the outbreak turning into a pandemic have now doubled. The odds are up from 20% to 40%, according to a report from Moody’s Analytics. “Our previous assumption that the virus will be contained in China proved optimistic, and the odds of a pandemic are rising,” said the firm according to CNBC.
If this outbreak becomes the pandemic many are suspecting it will, the markets will take a further beating. Moody’s says that a global and U.S. recession is certain should the outbreak be labeled a pandemic.
“The economy was already fragile before the outbreak and vulnerable to anything that did not stick to script. COVID-19 is way off script,” the economists said. “COVID-19 came out of nowhere. It may be what economists call a black swan – a rare and inherently unforeseeable event with severe consequences,” they added.
Coronavirus panic sent world share markets crashing again on Friday, compounding their worst week since the 2008 global financial crisis and bringing the wipeout in value terms to $5 trillion.
The rout showed no signs of slowing as Europe’s main markets slumped 2-3 percent early on and the ongoing dive for safety sent yields on U.S. government bonds, seen as probably the securest asset in the world, to fresh record lows.
Your savings account is at an even bigger risk now too. Analysts are now wagering that the Federal Reserve will cut U.S. interest rates as soon as next month and other major central banks will follow to try and nurse economies through the troubles and stave off a global recession.