The coronavirus continues to claim lives, yet the impact on global demand and companies is just starting to be felt. Recent days have seen an unremitting flow of dire headlines as supply chains from New Zealand to the United States felt the impact of a paralysed China.
Toyota and Honda are suspending production in China, Hyundai has halted work in South Korea, airlines are grounding flights and reducing staff, and central banks are easing policy.
China’s 2020 growth estimates have been slashed as much as a percentage point from the 6% initially expected. Some factories could reopen in the coming days, while others are expected to stay shut for now.
Some financial markets were quick to recover: Wall Street climbed to records, encouraged by earnings and economic data. Chinese stocks, which lost $700 billion of market value on reopening after Lunar New Year holidays, have now clawed back half those losses. Yet commodity prices such as copper and oil, seen by many as a better signal for the real economy, still have some way to recover.
Investors waiting to get a readout of the economic toll may have to be a bit more patient. Inflation and monetary indicators in China are scheduled for release over the coming days, the latter expected to show some effects of the central bank’s efforts to support suffering firms.
But retail sales and industrial activity will only be published in March, while trade data due out for release on Feb. 7 has been postponed.