COVID-19: A Financial Explanation

Updated: Jun 21, 2020

First and foremost, I hope that you and your families are safe and healthy during this difficult time. Remember to follow the advice of your local authorities, and we can only pray that life will return to normality as soon as possible.

The coronavirus pandemic has created an unprecedented situation. Entire countries and continents are in lockdown, businesses are closed, and unfortunately, it appears that we have not yet reached the peak of the global fatality figures yet.

In the financial world, stock markets have crashed, economies are paralysed, and there is a high level of uncertainty. No one knows when this pandemic will finally be over.

Having spent the last few months in Spain, one of the worst affected countries by the virus outbreak, I’ve been able to see first-hand the devastating effects that COVID-19 has had on an economy that relies so heavily on tourism. I remember that, less than a month ago, the country announced its first confirmed case of the coronavirus, and now, as of today, there have been almost 65,000 in the country, with 5,000 deaths. Only Italy has a higher death toll globally.

Before I left the country to return to the U.K., I witnessed the collapse of Spain’s economy right before my eyes. Everything closed. Sports fixtures were cancelled and postponed, museums and theatres closed their doors to the public, restaurants and bars, the epicentre of Spanish cultural life, also shut shop. All schools, universities, and businesses, including the one that I was working at, became deserted. High streets and highways turned into ghost towns. Flight after flight was cancelled, and all that remained open were a limited number of supermarkets and pharmacies. So, upon witnessing this deteriorating situation, it led me to question, what does this mean for the world? I’ve seen close-up how a virus can single-handedly take down a country and its economy, but is this going to be mirrored globally. In the next few weeks, are we really going to be a world in lockdown? And, just days later, the answer is clear.

There’s so much to write about the coronavirus outbreak and its financial implications; its strain on governments around the world, its ability to reap havoc on companies, industries, and commodities around the world, and its general disruption. If given the time, I’m sure that I could write pages and pages about how the pandemic has dealt a fatal blow to global economies, to small and large businesses that will inevitably go under, to students who don’t even know whether they’ll be able to graduate in a couple of months, to homeowners, who can no longer afford to pay rent, or to doctors who are choice-less in working endless shifts. One thing that we have learnt over the course of the last weeks is that this virus does not discriminate. However, unfortunately, due to word limitations and limited attention spans, this is not possible. Therefore, below, I’ve compiled a list of several resources that best explain, at varying levels of complexity, how the coronavirus outbreak has affected the financial world. I hope that my choice of articles will help you to really understand the impact of the virus on various different sectors, countries and economies, and that we won’t have to endure this chaotic tragedy for much longer.

Stay safe, and as always, if you’d like to know more, have any questions, suggestions for future articles, or feedback, please feel free to leave a comment below, or on The Student Investor’s LinkedIn page here.

Coronavirus and its Effects on the Corporate World:

This article is written at an intermediate level, and sheds light, in a Q&A form, on the impact of the pandemic on banks, financial transactions, and the wider corporate world.

Coronavirus: A Visual Guide to its Impact:

What I like about this article is that, with the use of graphs and figures, it explains in very clear and simple terms how the virus has affected stock markets, restaurants, oil and gold, pollution, and car sales, among other variables. Although now a week old, it is still a very good piece that can be easily followed.

JP Morgan’s Assessment of the Fallout from Coronavirus:

At a slightly more advanced level, this article focuses on how economies have contracted, how monetary policy globally has been implemented in response to the pandemic, and how airlines and cruise companies have been affected. For specific focus on travel and tourism, this is a very interesting read.

Coronavirus and Its Effect on Financial Services:

This page is written as a timeline, giving you the key updates from each of the major players in the financial world, on a day-to-day basis. Definitely one to keep an eye on as we head into a tricky and turbulent period.

Finally, be sure to actively follow websites such as the Financial Times for daily updates. Below, I’ve compiled just five of its latest articles regarding COVID-19 and its various implications. To stay in the loop and understand how it is continually and increasingly affecting the financial world, websites such as the Financial Times, and The Economist, are the best places to find information.

1. Why Food Delivery Apps are Struggling Even Under UK Lockdown?

2. Wall Street Flees Coronavirus and Glimpses its Mortality

3. Anthony Bolton Says he is Prepared to Buy Equities

4. Coronavirus Turmoil Delivers Shock to the Hedge Fund Industry

5. The Pandemic Shock Will Make Big, Powerful Firms Even Mightier