“The virus is totally underrated,” CNBC’s Jim Cramer says when discussing the effects coronavirus will have on the stock market and the global economy.
He warned Monday, “We have lost containment” of the virus.
“At what point do we say that many, many companies are going to be hurt by the virus [and] we’re paying too much for stocks?”
The numbers agree with Cramer.
“Coronavirus sinks the markets,” as one CNBC headline summed it up.
“I don’t think there’s a letter in the alphabet which adequately describes the profile of the economic shock that … we’re beginning to see,” Jonathan Pain, author of The Pain Report, told CNBC’s “Street Signs” on Monday morning. “Of course there will be a recovery at some point in time, however, we don’t know when that point in time is.”
Cramer explains, “I don’t want to shake anybody’s hands” in this Squawk on the Street clip:
— Squawk on the Street (@SquawkStreet) February 21, 2020
Companies are feeling the strain
Coronavirus has now begun to rapidly spread outside of China with 150 cases reported in Italy and 830 in South Korea. These new outbreaks bring the total confirmed cases around the world to more than 79,000, and there have been 2,600 deaths so far.
The spread is hitting companies in the wallet.
Delta, American, and United airlines have all seen their shared take a dip. Las Vegas Sands dropped 4%, as did Wynn Resorts. MGM Resorts saw a similar slide.
Even Apple is taking a hit with shares down 3.8%.
Cure, Not yet.. Prevention…not yet… But death rate lower than the media wants to make out. However, the commercial effects–my job–could be more severe than thought…
— Jim Cramer (@jimcramer) February 24, 2020
According to U.S. Treasury Secretary Steven Mnuchin, any economic impacts from coronavirus will not last beyond 2020. He insists that the United States has a fiscal backup plan in place, but he says “we’re at a point where it’s too early to either say this is very concerning or it’s not concerning.”
The CDC is busy preparing for a less rosy outlook as they work “to ready our public health workforce to respond to local cases and the possibility this outbreak could become a pandemic.”