'Are markets overreacting to the coronavirus, or is the US economy on the verge of taking a major hit?' writes Gad Levanon for CNNBusiness Perspectives. 'It depends on the extent to which the virus escalates. The US economy faces two potential scenarios.'
Gad Levanon is a vice president at The Conference Board, where he heads the Labor Markets Institute. The opinions expressed in this commentary are his own.
.leftside-floating-image { width:100%; display:block; margin:0 auto 1.5rem; } @media screen and { .leftside-floating-image { float:left; width:50%; max-width: 200px; display:block; margin:0 1.5rem 1rem 0; } } As the coronavirus spreads, stock prices have been in free fall. Since its peak in February, the S&P 500 has plunged by 17%. Oil prices are plummeting, too.
For sure, the performance of the financial markets isn't necessarily an accurate indicator of the overall performance and health of the real economy. But, the kind of descent the US market has suffered can create spillover that inflicts long-lasting economic damage. Are markets overreacting, or is the US economy on the verge of taking a major hit? It depends on the extent to which the virus escalates. The US economy faces two potential scenarios.
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