Fear and confusion about the possible effects of the new coronavirus pneumonia on the world economy led to concern this week for just about everyone new follows the news.
Many people in China are sick. Quarantines have shut down most stores in many parts of China, and they are limiting the ability of tens of millions of people to leave their homes to make purchases, or to work.
The quarantines are disrupting some Chinese factories’ ability to meet production deadlines for everything from pharmaceutical ingredients, to medical equipment, to clothes and shoes.
Medical labs have confirmed hundreds of cases of the new coronavirus illness, or Covid-19 pneumonia, outside of China, and governments outside of China are starting to impose travel restrictions and quarantines.
In the United States, federal officials have said they believe they can manage the situation, but state officials are reporting that they are having trouble getting the kits needed to test for severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), the virus that causes Covid-19 pneumonia.
California Gov. Gavin Newsom said Thursday, for example, that California has only about 200 SARS-CoV-2 test kits.
Some U.S. companies are starting to say that sales disruptions in China, production-related problems in China, or other Covid-19 effects seem likely to hurt their earnings this year.
Some investors have responded by rushing to convert a portion of their stock holdings into cash.
Individual investors and money managers may also be selling stock in an effort to keep the big stock market gains recorded in 2019, when conditions looked sunnier, from causing portfolios having more than the desired percentage of assets in stock.