President Donald Trump announced a ban on all travel from Europe Wednesday. The ban will go into effect on Friday at midnight and remain in effect for 30 days. The president did announce an exemption for travel from the United Kingdom.
Announcing a rare Oval Office address from Mr. Trump, he said:
“After consulting with our top government health officials I have decided to take several strong but necessary actions to protect the health of all Americans. To stop new cases from entering our shores we will be suspending all travel from Europe to our shores for 30 days.”
Economic Fallout from Coronavirus
Stock market futures and the bitcoin price tumbled on the news. It will directly impact financial markets and the economy in two ways. For one, it will disrupt a lot of business, trade, and travel between the United States and Europe.
The economic loss from this unfortunate measure to prevent the spread of novel coronavirus remains to be seen. But it will no doubt have a marked impact on many companies’ bottom line. Airlines, in particular, will feel an immediate effect.
Market Futures Tumble
Secondly, the draconian measure to stop the spread of coronavirus has already startled markets with the seriousness of the threat posed by COVID-19. Dow Jones futures tumbled in volatile price action after the announcement, as well as futures for the broader S&P 500 Index and tech-heavy NASDAQ Composite.
When the Federal Reserve announced an emergency rate cut on March 3, the stock market fell as the move spooked investors. It rallied some the following day, warming up to the half-percent reduction in the federal funds’ target rate, then dropped precipitously again the next day. By Wednesday, stocks had officially entered a bear market. It was the swiftest descent into a bear market from a peak in history.
Bitcoin Price Down Too
Just as the Bitcoin price appeared poised to test resistance at $8,000, Bitcoin immediately fell to the $7,600 handle following Trump’s announcement. It would seem, the more uncertain the future is looking, the more liquid cash everyone wants to have ready to spend in case of emergency. So far, Bitcoin is not acting as a safe-haven asset in this coronavirus crisis.