During the period of the recession in the United States, one would imagine that impact of virus outbreaks on the financial and political institutions of the country would be minimal. After all, no one is ever very worried about causing significant disruptions to the banking system or the stock market. However, because of the unprecedented growth of the financial sector over the past five years, the impact of viruses has become very noticeable in some ways.
One can see that the S&P 500 has experienced a double-digit drop in value during the past year. Furthermore, when you look at the big picture, there has been a sudden spike in currency depreciation, as the dollar value has lost twenty percent of its value during the past year.
The global economic climate, as seen by the effects of viruses, has indeed been something that people do not like. That said, it is not the most important reason why the economy is in trouble. Rather, it is far more serious than that.
During the last quarter of this year, S&P 500 companies’ stocks have all but collapsed as they have all but suspended trading. Now, here is where the financial world’s biggest crisis in recent history began.
The S&P 500 index, as seen by the chart, has experienced a massive loss in value. This massive loss in value represents a loss of more than forty percent of the index value, which is a negative return of more than twenty-three percent.
Clearly, the rest of the S&P 500 has also suffered from the crash in the recent months, although, for different reasons. Even though most other major indices also experienced a decline in value during the first half of the year, the losses suffered by the S&P 500 have been much greater.
That said, the S&P 500, as seen by the charts, has not yet returned to previous levels, so that we really do not know if it will. However, the market is certainly taking a huge beating and the pressure on many institutions is only beginning.
One thing that is clear, however, is that the effects of virus outbreaks are starting to take on a more damaging effect on the global economy, as well as on the currency and the stock market. The drop in the S&P 500 has been so drastic that it is almost impossible to even comprehend.
Since the peak of the last year, the S&P 500 has experienced an immense growth. So, given that the current situation is so alarming, how can one possibly judge if the S&P 500 will continue to rise?
For that matter, it is hard to believe that the S&P 500 can continue to rise as the next four quarters are all but certain to be terrible. It would be very difficult to justify such an increase in the end of this year.
Of course, the S&P 500 is still profitable, but one can see that the impact of virus outbreaks is beginning to take a tremendous toll on the entire global economy. Given the fact that the market values the S&P 500, it should not come as a surprise that the market values the other major indexes as well.