Coronavirus Surpasses 82,000 Cases Worldwide
- February 28, 2020
- Phil Cannella
- 0 Comments
As the second month of the COVID-19 Coronavirus comes to an end, the global markets are feeling the effects. The Dow Jones Industrial Average has lost more than 2,000 points in value and is on the verge of entering correction territory. Cases of the Coronavirus have rapidly spread across the globe during the final weeks of February, causing investors to sell their equities. The World Health Organization and Center for Disease Control are preparing for the potential of a global pandemic as Italy is the most recent country to experience an influx of Coronavirus cases.
The United States has remained relatively calm about the respiratory disease as less than 100 cases of the virus have developed in the country. Investors on the other hand have panicked and the market has continuously dropped during the final weeks of February. In response, President Trump has urged Congress to boost funding to fight the virus despite dismissing its threat to the United States. While preparations are being made for a larger spread of the virus, President Trump believes that warm weather will cause the virus to dissipate on its own and does not fear that a pandemic will find its way into the United States.
Conversely, the Center for Disease Control (CDC) and World Health Organization (WHO) have prepared procedures for potential work and school closures in the United States and elsewhere, should the virus be declared a pandemic. Japan, in an attempt to jump ahead of these procedures, has asked schools to close indefinitely until the virus can be contained.
In the two months since the WHO first released reports about the virus in Wuhan, China, there have been more than 82,000 cases worldwide, with more than 70,000 of those cases being located in China and the surrounding nations. Nearly 3,000 of these cases have resulted in fatalities, while more than 30,000 have fully recovered. Overall, the virus has not been as deadly or as contagious as Influenza – otherwise known as the Flu. Seniors and those with pre-existing conditions tend to be more at risk to the Coronavirus with a 14.8% fatality rate for those over the age of 80. Individuals under 60 years old have a .46% chance of dying from the virus.
Also joining the fight against the Coronavirus is the World Bank. Following the events of the Ebola virus from 2013-2016 and the monetary issues that emerged as a result of their response in Africa, the World Bank created a pandemic bond fund to raise money to address future global outbreaks. In 2017, the pandemic bond fund was created and has raised a total amount of $425 million. If a pandemic was declared, the bonds would default and the money would be dispersed to developing under-resourced countries who would need financial assistance in fighting the outbreak. On the other hand, if the virus does not become a pandemic, bond investors will continue to receive annualized returns on their investment until the bond matures.
When the bonds were created, the World Bank listed the Coronavirus in both the Class A and Class B bonds as one of the diseases or viruses that the fund would cover should there be a pandemic. It should also be noted that these bonds are set to mature in July of 2020. In light of this fact, investors who invested in these bonds will not receive a final payout when the bond matures if a pandemic is declared. Should the Coronavirus become a pandemic, the bonds will default and the World Bank will utilize the funds where necessary to aid in the fight against the virus.
Hysteria surrounding the Coronavirus has resulted in the market losing more than 2,000 points in a matter of days while causing concern for leaders around the world. That being said, the Coronavirus is not nearly as contagious as Influenza, nor as deadly. $425 million in bonds from the World Bank does not seem to be an influential amount of money if a pandemic were to break out, considering the United States is preparing a $2-$9 billion response to keep the virus from spreading throughout the country. If the virus is similar to Influenza, it may dissipate when the weather begins to warm within the next two months; however, a response is necessary in the meantime to avoid new cases being developed in the United States.
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