China’s Coronavirus Chaos Continues

China’s Coronavirus Chaos Continues

As the Coronovirus panic continues in China yet another company has spoken out about their concerns about the virus and its impact on the market.

The company that is sharing further concerns is the luxury fashion brand, Burberry, after having already closed 1/3 of their stores in China in a reaction to the virus that has claimed the lives of over 400 people in the country. In a new statement released today, they have indicated that their concerns run deeper than previously thought and that they feel that the virus could have a larger impact on the market than they had expected as the condition in China worsens and thus, are taking the necessary steps by which to ensure that they do not suffer big hits.  

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According to a post on CFD and crypto trading platform, eToro, Burberry CEO, Marco Gobbetti stated that they “are taking mitigating actions and every precaution to help ensure the safety and wellbeing of our employees. We are extremely grateful for the incredible effort of our teams and our immediate thoughts are with the people directly impacted by this global health emergency”, before explaining that “The spending patterns of Chinese customers in Europe and other tourist destinations have been less impacted to date but given widening travel restrictions, we anticipate these to worsen over the coming weeks.”

He also stated that Corona was having a “material negative effect on luxury demand”. This can be felt across the industry and they are not alone in their concerns as other big-name fashion brands such as Louis Vuitton and Gucci’ respective owners, LVMH and Kering who own have also seen their price suffer which has been considered as a direct result of the virus. While another big player in the world of fashion, albeit sports fashion instead, Nike has also raised concerns about the virus going forward.  As such, the fashion industry seems to be one of the many industries that are currently suffering due to the on-going issue.

However, there is some hopeful news from the country though due to China halving tariffs on $75bn worth of imports that are arriving from the US on February 14. Due to this, the Chinese economy did receive a boost and shares jumped both in China, as well as other affected areas like Hong Kong and Japan.  This also looked soothed the growing tensions between the two nations that have been on-going, an issue that China cannot afford to maintain if these current hardships continue.

According to eToro “US shares rallied on the news, pushing past last week’s coronavirus related selloffs.  All three major stock indices closed at new records, and the Nasdaq composite posted its 10th record close of 2020.” As such, the move led to good news all around and had a multi-faceted benefit.

This said, if you are still wary of typical stock investment in current climate then you should maintain crypto investment interests because, as we reported on Wednesday, the coronavirus may not affect them, or in some cases, could even be a positive. You can get involved at this at eToro.

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