Swaths of China’s economy remain shuttered as the coronavirus outbreak continues to hamper activity, within the country and the surrounding region — while some of America’s largest corporations are starting to feel the pinch.
To date, over 72,000 people have been infected worldwide — most of them in mainland China — while deaths are nearing 2,000. However, over the weekend France reported the death of a Chinese citizen within the country, while hundreds of people on a quarantined ship near Japan were diagnosed with the deadly illness.
As infections and deaths continue to climb in the world’s second largest economy and beyond, markets were shaken by news that Apple (AAPL) would miss revenue estimates for the quarter ending in March.
“While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated,” Apple said in a statement.
The outbreak has forced Apple and other companies to close down Chinese operations, and the country’s integral role in the global supply chain is creating supply bottlenecks for the iPhone maker, and undercutting other multinational organizations.
Lockwood Advisors CIO Matthew Forester told Yahoo Finance the virus is now starting to exert more influence over analysts’ outlooks.
“I think we’re starting to worry about what the real economic impacts are going to be from coronavirus,” he said.
Yet there are hopeful signs that the outbreak may be waning, amid slightly fewer new cases being reported daily.
‘Naive to think’ effect will remain contained
On Tuesday, Walmart (WMT) also cautioned that the mystery virus may pose downside risk to its upcoming quarterly results. On Tuesday, the big box retailer reported earnings that were dampened by a shortened holiday season, which dragged on its stock price.
For now, most economists expect the coronavirus’ impact on the U.S. to remain contained: The Empire State Manufacturing Survey on Tuesday said the damage from the virus will be relatively limited.
Still, with China showing no signs of returning to normal, or being able to arrest the virus’ spread, fears are growing for the global economy.
Germany and Japan both cited the outbreak as reasons for slowdown in their economies, while stocks tumbled anew on Tuesday. Apple’s warning sent a chill down the spines of investors, and served as a stark reminder of the global economy’s interconnected nature.
“We are a global economy,” Kevin Simpson, Capital Wealth Planning founder and CEO, told Yahoo Finance Tuesday. “It’s naive to think it won’t have a global impact.”
What’s happening around the world
American citizens from the Diamond Princess, the cruise ship that was quarantined in Japan and reported more than 500 cases of the virus, are being brought home as fears of the potential spread remain.
In France, where the country reported its first coronavirus-related death, the new health minister issued a chilling warning that the virus could mutate into a global pandemic, an outcome that the World Health Organization has attempted to contain.
Meanwhile, those in Hubei province and mainland China at-large are seeing the effect on food supplies as the quarantine continues to be in effect.
Factories have slowly started to come back on the mainland, including Tesla’s gigafactory, but are unlikely to return to full speed.