A&M political economist discusses market reactions to Coronavirus concerns

BRYAN, Tex. (KBTX) - Often when the stock market is reacting to geopolitical events, Raymond Robertson with the Texas A&M Bush School of Government and Public Service says the reaction is based on perception rather than stark reality.

Source: MGN

However, as huge losses roll in due to concerns over the spreading Coronavirus, Robertson says this time is different.

“Stock markets do tend to overreact, but production in China has been shut down for a couple of months,” said Robertson. “Even though production is resuming, those effects are now starting to affect the [U.S.] economy. Now the supply lines are starting to feel the pinch, and that’s affecting the stocks.”

Robertson says the U.S. medication supply is a big concern at this point, as 80% of the medication used here in the U.S. is produced in China.

“But there are many other products that will be affected, too,” said Robertson.

Furthermore, collapsing economies in struggling nations will harm the world economy as well.

See the full conversation with Robertson in the video player above.