25%?! I hope that's an exageration. I know that hearing about a 1000pt daily drop sounds like a lot, but when the markets are near all time highs, it's not a significant percentage. If you've lost 25% in the last couple of days, something is wrong with your portfolio. And as long as you've been invested for the last few years, you should still be significantly 'in the black'.
The DJIA is down just 7% in the last 5 days. Including this week's drop, it's still up over 4% for the last 12 months, and up 59.9% for the last 5 years total.
The S&P500 is down is down a similar 7% in the last 5 days, but is up over 11% for the last 12 months, and up over 58% for the last 5 years.
As for the overall economic impact, I work for a large, global company in the industrial/manufacturing sector. We have operations all over China, including Wuhan. China is the second largest economy on the globe and it's more or less shut down for a month now. Q4 2019 was the worst single quarter since 2009, and they weren't forcasting much if any improvement for 2020 thanks to a declining/slowing global economy. That's a consistent outlook for pretty much any large scale machinery/transportation company from what I've seen, and that was before the virus started to shut things down. That means Q1 is likely to be worse for industrials than expected, and that damage is likely to spread into other sectors of the market too. I think it's going to drop more over the next couple of months, particularly when Q1 results are out, so I'd turn off the news and avoid looking at your stocks if you get nervous about these things. Whatever you do, don't panic and sell.
Yes, an exaggeration...but your loosing $$$ non-the-less.
A 1900 point drop in 2 days is a big deal. It wiped away any $$$ that was made in the last 2-3 months. My wife's 401K account dumped all that was made since the beginning of the year. So, even when the market rises, it will now have to make up for what was lost, before any new gain is shown.
As far as an overall impact from the virus, we haven't felt it here yet, and in the manuf area might not see it. But think about this...
If it does spread here, the industries that support cruise lines, airlines, railroad passenger travel will all suffer simply because people will not want to travel in large crowded areas. Then you have the hotels and restaurants that support travelers. The food and custodial companies that take care of and maintain ships, planes, hotels.
Again, it's a snowball effect. The travel agencies that set trips up, car rentals, trip planners. These businesses may not go out of business but may be hurting . It's not just the companies in china making auto parts, but it will dribble down to the average citizen.
If/when it hits here people will stop going to movies, shows, concerts, anywhere there are large crowds. Even going to Wally World may be a challenge.
Not trying to be "Mr Doom", but it is just the nature of people to get scared over something like this. Just today San Francisco declared a "state of emergency". Have no idea why, but they did. Can you imagine what that is going to do to their tourist industry ?
Grumpaw