For weeks, there has been a strange divergence among those trying to predict what coronavirus might mean for financial markets and the world economy.
People in the trenches of global commerce — supply chain managers, travel industry experts, employers large and small — warned of substantial disruptions to their businesses. And public health authorities feared that the disease could spread far beyond Wuhan in China.
Yet financial markets and most economic forecasters projected the virus outbreak wouldn’t do much harm to the economy and corporate profits — at the least, nothing that an interest-rate cut or two from the Federal Reserve couldn’t fix. The S&P 500 hit a new high less than a week ago, last Wednesday.
Something had to give, and on Monday it did. After reports of people infected with the virus in the major economies of South Korea and Italy, the more pessimistic view began to prevail across major world markets.