But isn't it the impact of the coronavirus threat which pushed the market's behavior? The fear of a more widespread impact on world trade is exactly why Wall Street telegraphed that kind of signal, which is said to mirror the market behavior before the 2008 recession ( although that was more due to the bubble bursting in the financial market). Given that China is considered the factory of the world and also supplier of some rare natural resources, the impact is both on the supply side and the demand side of commerce and trade! China has closed its manufacturing operations to some extent and the supply chain is expected to be broken ( Apple has already announced expected delays in shipment of its products). On the demand side, demand has softened so significantly especially on the travel and retail side. Look at all the aggressive promos that credit card companies, hotels, airlines and retail stores are plugging to encourage purchase of goods or services. Layoffs or incidence of unpaid leaves have been announced especially for the airline industry... Also, China is one of the largest consumer market for Hollywood films.
Hollywood is very fearful - as its tentpole business is facing threats of people not showing up to see the movies in many places, incl China. What will happen to the billion-dollar box office champs that are lining up for the summer season ( Bond/Wonder Woman/Fast&Furious/etc)? In the case of Disney - people are wondering how its $200 million( that does not include promotion) budget movie with an all-Chinese cast, MULAN, will fare? Not only that, it is facing temporary closures of its theme parks. Of course, unlike most of Broadway though - the big studios have the option of streaming the first releases. And indies will likely be available on TV or streamers... Some Hollywood film productions have already stopped temporarily esp in places where the health threat is siginificant (e.g., Italy).
Fortunately for the USA, there is a very low incidence of infection at the moment.
We all hope the health crisis will blow over soon! It may not just be losing a chance to see a show on Broadway ( because one is reluctant to travel or be in an enclosed space) -- but it could mean, for some, even a loss of a means of livelihood... and even more tragically, the health impact of the virus crisis.
Updated On: 2/29/20 at 04:26 PM