Question

Gold is up; stocks are down and cleaning product companies are doing well. Can anyone tell me why is this virus affecting the stock market in the USA?

Unemployment soars and Corona virus epicenter moves to the US. Just curious for your thoughts on the potential ramifications, both for the economy of the US in GDP and also the reported tensions between China and US trade?

The coronavirus has affected the entire economy leaving businesses around the world counting costs. A lot of investors in the entire world are fearing that because of the spread of the virus will destroy economic growth and that the government if they do not take actions it might not help to stop the decline. In the other hand, the number of people filing for unemployment in the united states hit a record.

Answer 1

Us China trade war is all set to escalate as Americans are savvy of fact that Coronavirus damage is caused due to Chinese bionuclear weapon testing which will amplify trade relation in negative way.

Similarly, Coronavirus has caused massive shutdowns globally and exports have declined, trade has plummetted, consumption is subdued and companies have been forced to minimise lossess by layoffs which led to rise in unemployment.

This causes further dip in aggregate demand and consumption and thus real GDP takes colloquial hit and thus stock markets react to negative scenario and they fall rapidly citing recessionary phase.

Now gold and stock prices move in opposite directions usually as equity markets fall, investors move towards safe haven assets and so do central banks and mutual fund houses buy Gold in large quantities and raise its demand causing the prices to skyrocket.

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