U.S. consumer spending could see one-two punch from stocks drop, coronavirus

NEW YORK - The coronavirus outbreak has yet to spread meaningfully to U.S. shores, but fears of it alone have already eviscerated some $2 trillion of American stock market value, setting off a market rout that could stymie consumer spending - even before other economic effects of the disease are felt.

“The tightening of financial conditions I think is really the key game changer in this outbreak,” said Gregory Daco, chief U.S. economist for Oxford Economics. Through Tuesday, the S&P 500 had fallen 7.6% from its record high last Wednesday, wiping out more than $2.1 trillion of value in just four days, a historic loss in paper wealth.

Wealthy consumers, who have large stakes in the stock market and make up a substantial share of consumer spending, could also reduce their spending, said Danielle DiMartino Booth, founder of Quill Intelligence and a past adviser to former Dallas Fed President Richard Fisher. This could lead to reduced sales of luxury goods and lower spending on hotel stays, Booth said.

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Donald Trump is furious about coronavirus-related stock market drops, blames CDC for spooking investors: reportThe president has informed his advisers not to make dire predictions about the financial impact of the virus, The Washington Post reported. Only a matter of time before he is spreading theories that China spread the virus deliberately to favour Democrats. Yep...he doesn't give a shit about no one past himself. LindseyGrahamSC I blame you for this monster.
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