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The Ups and Downs of the ‘Corona-conomy’

Posted on by amalson

The United States has experienced plenty of peaks and valleys amidst this pandemic, including economically. The stock market has been almost consistently down since the beginning of March, with the Dow Jones 18,591 on March 23, according to CNBC. While there were small rises and drops during the several months of quarantine, recently there has been a significant rise, with the Dow Jones at approximately 27,000. These numbers seem promising, but investors should continue to be wary, as there is a fear of a large market run-up. This means numerous investors will see the numbers as a positive and invest heavily, but as soon as things spiral downward, they will panic and quickly sell.

The fears that the market will face another downturn should be at the forefront of people’s minds, as the United States is experiencing a sharp increase in cases after a period of improvement. With many states halting their reopening plans, the stock market may be looking at another big hit. States like New Jersey, New York, and Connecticut have been experiencing stability, causing them to be more cautious with interstate travel. Investors are now feeling afraid that state closures will disrupt the current state of the economy.

Thomas Lee of Fundstrat Global Advisors established a simple list of public policy steps to curb the increase of infections. The steps are simple, such as requiring sanitization, as well as wearing masks. This list was created in hopes of influencing political officials because, if the number of cases drops, the stock market will continue to thrive.

While the United States’ economy has seen much changeability over the course of the pandemic, the rest of the world has also experienced economic woes. The Organization for Economic Co-operation and Development has predicted that the global GDP for 2020 will be half of what it usually is. It will be extremely difficult for the global community to recover from this pandemic, as many countries implemented such constraints as travel restrictions, while battling domestic economic issues at the same time.

The World Bank has estimated that within the coming years, approximately 60 millions citizens will fall under the poverty line globally. It will be immensely difficult for the global economy to bounce back from this tragedy, and in the future things will likely run differently in the international community as all countries struggle.

(1) https://www.foreignaffairs.com/articles/united-states/2020-08-06/coronavirus-depression-global-economy

(2) https://m.economictimes.com/wealth/invest/stock-market-hit-by-coronavirus-reasons-for-turmoil-what-equity-investors-should-do-now/amp_articleshow/74623291.cms

(3) https://www.cnbc.com/amp/2020/07/23/you-may-be-warming-to-the-stock-market-be-prepared-for-it-to-drop.html

(4) https://www.marketwatch.com/amp/story/stock-market-investors-are-suddenly-spooked-by-rapidly-rising-coronavirus-cases-in-the-us-heres-why-2020-06-24

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  1. First and foremost, I just want to essay I absolutely love your title. It is important to look at the effect of the pandemic on the economy both in terms of investing and the stock market and the general well being of the country, but in terms of everyday life as many working-class Americans begin to lose jobs and fall into poverty. This has been a frequent concern throughout the pandemic, and many wonder what human losses we are willing to take to recoup the economic losses. How do you think the balance between human life and economic prosperity should be weighed?

  2. “and in the future things will likely run differently in the international community as all countries struggle.”

    Fascinated by the closing line of your post here. It hints at a great cataclysm but also perhaps the promise of a new world. In America, it feels like many of the most disastrous decisions made during the COVID-crisis were for the benefits of markets. Too often states rushed to re-open for the sake of businesses that simply couldn’t sustain that long a period without revenue. People in the White House administration such as Larry Kudlow seemed to place a higher emphasis on keeping the stock market and major companies stable over people’s lives. Early on in the pandemic cities like New York suffered from a few fatal days delay to close restaurants and schools because they were worried about disrupting the flow of work. I’d be interested in hearing your thoughts on this dilemma or although it is perhaps a false dichotomy for me to say that there was a greater emphasis placed on capital’s well being over the public’s health.

    Back to that last sentence—we continue to measure economic success via stastics GDP, the DOW Jones, etc. Which makes proper sense because it’s the closet we have to scientific evidence of a healthy economy, but one has to wonder if there could be more than these simple metrics. The rush to dangerously re-open our country was motivated by market movements like these, yes, but I believe that there was an even greater force driving us even when we knew we would be risking our lives to do so. We humans need work, need to build and contribute, the days without end in isolation disrupted our pysches in a bad way and no politician could come up with an alternative. A way to fulfill our lives without having to leave our houses for the sake of public health. It will be a fascinating next few years to see if such policy as the exanded unemployment benefits will become the basis for a new universal basic income program or a federal jobs gurantee. I long to see the day when it will be possible for the American worker to not have to choose between their health and financial destitution. Perhaps this is the beginning of a new way to re-think the basic problems of our economy.

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