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Here’s How Much the Coronavirus Is Costing the World (So Far)

Stocks are plunging, vacations are being canceled, and that's just the beginning.

American President with face mask against CoV infection. 100 dollar banknote. Coronavirus in United States. Concept quarantine and recession. Global economy hit by corona virus outbreak and pandemicDiy13/Getty Images

The other devastating effects of the coronavirus

The coronavirus isn’t just costing lives; it’s also costing livelihoods. As the death toll rises around the world and the disease spreads throughout the United States, it could cost the global economy trillions in lost income, stock-market drops, tourism dollars, and more. So, just how much money will it cost us? Early estimates from Bloomberg put it at $2.7 trillion—but that was before coronavirus was declared a pandemic, all of Italy went on lockdown, and the United States started canceling everything. This crisis will also have some surprising repercussions in seemingly unrelated ways, including the major way it’s already affecting construction. Here’s what this virus is doing to us financially—and has the potential to do as the crisis worsens.

A Chinese man wears a protective mask as he walks near an Apple Store in a nearly empty shopping area on February 18, 2020 in Beijing, China.Kevin Frayer/Getty Images

The Chinese economy is virtually paralyzed

This will have a deep and profound effect on the global economy, says Tenpao Lee, PhD, a professor of economics at Niagara University. “With our global economy, and the fact that China makes up about 16 percent of that, the economic ripple effects will be felt around the world,” Lee explains. “The global supply network has been broken, and a significant portion of the global economy is halting.” Lee believes that a global recession—affecting developed and developing countries—is inevitable in the first two quarters of 2020. You might find yourself in a less painful spot if you have one of these 12 recession-proof jobs that will survive the next economic downturn.

A board on the floor of the New York Stock Exchange (NYSE) on March 03, 2020 in New York City.Spencer Platt/Getty Images

Stocks are plummeting

Global equity markets lost trillions in value during the week of February 24, says Andrew Schrage, CEO and co-founder of Money Crashers. “Much of that value will return as the initial panic subsides and central banks take emergency action to assuage investors’ fears, but that’s not much comfort for weak-kneed investors gaping at their shrunken 401ks,” he says. That panic was nowhere near subsiding in mid-March, as the epidemic turned into a pandemic and the stock market continued to fall. In fact, on March 12, the market experienced a single-day 10 percent loss, the DOW’s worst day since 1987’s infamous Black Monday, pushing it into bear-market territory.

This isn’t just bad for your 401k but for the economy as a whole. The Federal Reserve is attempting to infuse the market with an estimated $1.5 trillion of life support to stanch the bleeding and keep us out of a global recession, but will it be enough? If not, this will turn into a longer-lasting problem. As CNN Business explains: “If those markets shut down, like they did in 2008, banks would stop lending to each other and cut off capital provided to Corporate America. In other words, a health crisis would turn into a credit one.” Global crisis or not, these are 17 things you need to know before investing in stocks.

Taxis wait for passengers at John F. Kennedy Airport (JFK) on January 31, 2020 in New York City.Spencer Platt/Getty Images

Airlines and hotels are suffering

The travel and logistics sectors have been the hardest hit, Schrage says. In particular, airlines and transportation companies have lost many billions in market value since the beginning of the year. “The shock is worse than anything that’s happened since 9/11,” Schrage says. “Depending on the extent and duration of the pandemic, the long-term impact could wind up being worse than 9/11.”

Early estimates put the cost to the U.S. travel and tourism industry at $24 billion and the cost to airlines at $113 billion. Globally, another industry expert estimated around $820 billion in losses. Those figures, however, came out before President Trump’s partial European travel ban and the announcement from major tourist attractions that they would be closing for the foreseeable future. Speaking of which, here’s how to get a refund if a world crisis forces you to cancel a trip.

The Princess Cruises’ Caribbean Princess is seen docked at Port Everglades on March 12, 2020 in Fort Lauderdale, Florida.Joe Raedle/Getty Images

Cruises have been docked

With cruise lines losing money as their ships have been quarantined due to coronavirus outbreaks and fewer people wanting to travel by ship during this crisis, some are halting operations altogether. Princess Cruises, which has 18 ships and usually serves more than 500,000 people a day, suspended travel for 60 days. This caused parent company Carnival’s shares to drop by another 31 percent; they are down 70.6 percent since January 1. Disney is also docking its cruise ships for the rest of March. When the threat has finally passed, the industry will likely offer majorly discounted trips as a way to get passengers back on board. In case you were wondering, this is what happens if you get sick on a cruise ship.

a man sits alone in an empty cafeOmar Marques/Getty Images

People will lose their jobs

When businesses are shuttered, they aren’t making money…which means there isn’t any money (or, at least, there’s less of it) to pay employees. As a result, there will be layoffs. Small businesses will also be particularly susceptible to the effects of people staying home, away from crowds and away from businesses, and some will be forced to close for good. As the Independent writes, “Coronavirus’s economic danger is exponentially greater than its health risks to the public. If the virus does directly affect your life, it is most likely to be through stopping you going to work, forcing your employer to make you redundant, or bankrupting your business.”

The gig economy will also pose problems for many workers, as they won’t be hired during this virtual shutdown—and therefore won’t be getting paychecks. According to Deutsche Bank, 15 million workers, including independent contractors, on-call workers, and temp-help agency workers in a wide range of industries, are at particular risk.

Commuters Navigate Mass Transit During Rush Hour Amid Coronavirus ThreatCindy Ord/Getty Images

Sickness may lead to personal bankruptcies

With many people living paycheck to paycheck in this country, things are already precarious. Add in potential layoffs, child-care issues, and costly medical bills, and it’s a recipe for disaster. According to a recent Healthcare.com and YouGov poll, nearly half of insured Americans worry about being able to afford the costs of treatment if they come down with coronavirus. And that’s among insured adults. While the exact costs still aren’t clear, patients have received bills of more than $3,000 just for the tests. And being treated at an out-of-network facility—say, if intensive care is needed or your in-network hospital is at capacity—could run patients in the tens of thousands of dollars. Here’s what really happens when you file for bankruptcy.

Times Square in New York CityGary Hershorn/Getty Images

New York City grinds to a halt

While this is happening in a number of major cities in an attempt to slow the rate of infection, it is perhaps nowhere near as shocking as it is in the city that never sleeps. Museums are closed, restaurants are empty, and Broadway’s lights are off. While it may be hard to understand just how much revenue may be lost, consider this: In 2019, when a power failure caused Broadway to go dark for five hours, it cost producers $3.5 million in revenue. Now multiply that by 30-plus days for some seriously staggering figures. Of course, that doesn’t take into account the lost wages for actors, production staff, and associated businesses that benefit from Broadway. The curtain has also been lowered at the Met and Lincoln Center.

Big 12 Basketball Tournament - QuarterfinalsEd Zurga/Getty Images

Sports are benched

It started with March Madness and quickly spiraled into the NBA, the NHL, the MLB, and U.S. and European soccer. All of your favorite sporting events have either been canceled outright or suspended for at least the next month. Here’s a little perspective from a financial standpoint: According to Fox Business, the NCAA raked in an estimated $933 million during 2019’s March Madness when factoring in media rights, ticket sales, and sponsorships. And that’s just for one college-sports championship.

In the meantime, check out some interesting sports facts, like why Americans say “soccer” instead of “football.”

anonymous family leaves disney parkDavid McNew/Getty Images

Disney has closed

The happiest place on Earth is no more…at least for now. Disney World and Disneyland have only closed a handful of times in their entire histories due to major world or weather events, and now, they will be closed through the end of March. How significant is this? In early February, Disney warned that the closure of its parks in China alone could equal a $280 million loss in the current quarter. Disney has said that it will pay its cast members during the closure, but this doesn’t account for the many other people employed by the parks.
When planning future trips, here’s something to keep in mind: This is when travel insurance is worth it—and when it isn’t.

Concern In Singapore As The Wuhan Coronavirus SpreadsOre Huiying/Getty Images

Inflation

Since many production factories are closed, the aggregate supply curve will shift to the left with higher prices and lower quantities, Lee says. “On aggregate demand, consumers staying home and spending less money to fuel the economy means it will also shift to the left with lower prices and diminished quantities of items sold, which also points to a possible recession,” he explains. “Put aggregate demand and aggregate supply together, and we are most certainly looking at a recession.”

Federal Reserve Lowers Key Rate By Three Quarters Of A PointChip Somodevilla/Getty Images

Interest rates are lower

In an attempt to make consumers and businesses feel more confident about the future, the Federal Reserve lowered interest rates. “The full emergency 50 basis points reduction is the first since the financial crisis, a sign of how serious central bankers regard the downside risks to the economy,” says Mark Hamrick, a senior economic analyst at Bankrate.com. “At issue is how much this inoculation can protect the economy and support the financial markets from a public health crisis and supply constraints radiating out from China.” But now that the benchmark federal funds rate target is 1 to 1 ¼ percent, it must be noted that the Fed’s most reliable ammunition—their lower rates—are dwindling, Hamrick says. The other challenge involves how the Fed may take back the rate cuts once the outbreak and economic damage is behind us. Thinking of using those low-interest rates to buy a new place? Make sure to avoid these costly home-buying mistakes.

Daily Life In Wuhan During LockdownStringer/Getty Images

Payments are late

Many businesses large and small have to wait for net payment terms before getting paid, says Steven Lee, cofounder of invoice finance marketplace Crowdz. “With these types of global incidents, the delay in revenue further pushes out when a company gets paid,” he explains. “Due to the loss of revenue from companies, factory shutdowns or stocks taking a hit, and fear of global catastrophes like coronavirus have a huge impact on business cash flows.”

New York City On Edge As Coronavirus SpreadsJeenah Moon/Getty Images

More cancellations

Events are no more. Aside from personal business trips and conferences, some of the bigger and more public cancellations include: music festivals SXSW and Coachella, Facebook’s Global Marketing Summit, Japan’s Azalea Festival, global fashion weeks, the China Grand Prix, all Live Nation Entertainment and AEG Presents music tours, and the Tribeca Film Festival, to name a few. Plus, there are concerns that the 2020 Summer Olympic Games, which are set to be held in Tokyo in July, might be canceled. That would be an enormous loss not just for the athletes but also for Japan’s economy, networks around the globe, and related industries.

The Olympics, of course, have dealt with adversity before. Check out these 13 Olympic moments that changed history.

Two women, both wearing a respiratory mask, walk in Piazza del Duomo on February 25, 2020 in Milan, Italy.Emanuele Cremaschi/Getty Images

Halted Hollywood productions

Excited about the next installment of the Mission: Impossible franchise? Sorry, but you might have to wait a little longer to see it. Production in Italy has been halted, and that may affect its 2021 release date. While experts aren’t yet sure what kind of impact the coronavirus will have on the entertainment industry as a whole, according to Business Insider, it’s not looking good. Aside from production delays, theaters in China are closed, and this will affect Hollywood greatly. China is a massive market for films—especially those that need to make back their $200 million production budgets. Mulan‘s live-action remake, for example, may not make it to China, which was expected to be its largest market.

In fact, Mulan is now not even making it to the United States—when it was originally supposed to, anyway. The Walt Disney Company has postponed its premiere, and Universal Pictures moved the release of its new Fast and Furious movie to next year. Talk shows are also taking a hit, with some nixing their live studio audiences and others, including The Tonight Show Starring Jimmy Fallon and Late Night with Seth Meyers, going on hiatus. Many scripted shows are also halting production, including all of NBC Universal’s shows. That’s a lot of advertising dollars down the drain, not to mention wages. And now that Tom Hanks and Rita Wilson announced that they have the virus, expect many other productions to come to a screeching halt.

While the news feels dire right now, there are measures you can take to protect yourself. Find out the 14 diseases, aside from coronavirus, that you can prevent just by washing your hands.

For more on this developing situation, see our comprehensive Coronavirus Guide.