How stock market turmoil amid coronavirus affects SWFL
Coronavirus is affecting all areas of human society. Amid the health crisis worldwide and here in Southwest Florida, the virus has hurt the stock exchange, halting trade for 15 minutes to start the week after the Dow plummeted more than 7%. Oil prices plunged too, having its worst day since 1991.
We spoke to a prominent economist who lives on Captiva Island Monday about how the stock market turmoil affects us here in Southwest Florida.
History on Wall Street: For the first time since 2013, a stock market circuit breaker stopped traders in their tracks. The Dow suffered its worst point drop on record.
“The intention is, let’s stop, let’s think about what we’re doing here,” said John Silvia, former chief economist at Well Fargo. “We don’t want panic selling across the board. Let’s stabilize the system, and that’s what they did.”
Silvia explained why the sudden fall on Wall Street matters to us all.
“A lot of people will have money in the stock market because it’s in their pension funds, so they may not realize that they have an immoderate exposure to the stock market,” Silvia said. “Second, stock market simply represents value in a corporation. So, if a corporation has questions in terms of its value, it’s going to invest less. It’s going to employ people less.”
Silvia says there is potential for increased downturn in the stock market if coronavirus continues to have the impacts it currently poses.
“We could easily be in a recession in the next two or three months if in fact the virus keeps on moving forward,” Silvia said.
Silvia told us the Spanish flu after World War I hit our economy much harder than the coronavirus is currently. And the stock market is still trading at a higher level now than when Trump took office.
Silvia said lowering interest rates is not enough to prevent a recession. He believes President Donald Trump must push some sort of stimulus package.
“I mean, he is going to have to step up to the plate and say, ‘OK, just can’t just be the feds lowering interest rates,” Silvia said.