{"id":50884,"date":"2020-02-01T18:52:55","date_gmt":"2020-02-01T23:52:55","guid":{"rendered":"https:\/\/olduvai.ca\/?p=50884"},"modified":"2020-02-01T18:52:59","modified_gmt":"2020-02-01T23:52:59","slug":"the-global-supply-demand-shock-of-the-coronavirus","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=50884","title":{"rendered":"The Global Supply &#038; Demand Shock Of The Coronavirus"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/global-macro-monitor.com\/2020\/01\/31\/the-global-supply-demand-shock-of-the-coronavirus\/\">The Global Supply &amp; Demand Shock Of The&nbsp;Coronavirus<\/a><\/h3>\n\n\n\n<p>Our analysis of the impact of the Coronavirus is a work in progress and nobody knows the endgame.&nbsp; It is still the early days of the epidemic, and its dynamics will take time to understand. The scale of the impact will depend on how contagious and lethal it reveals itself.<\/p>\n\n\n\n<p>There is a supply shock to global manufacturing as many factories in the world\u2019s supply chain will be shuttered for longer, which shifts the global supply curve left, increasing-price and production pressures.&nbsp; Ergo component shortages, higher prices, and lower production.<\/p>\n\n\n\n<p>The 2 percent decline in the U.S. stock market and collapse in bond yields are signaling a potential global aggregate demand shock that offsets the supply shock.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/macromon.files.wordpress.com\/2020\/01\/manufacturing_china_6.png?w=640\" alt=\"Manufacturing_China_6\" class=\"wp-image-61214\"\/><\/figure>\n\n\n\n<p>As of Friday, 10,000 cases have been confirmed by China, surpassing the total from the 2002-2003 SARS epidemic. The new virus has killed 171 people in China.<\/p>\n\n\n\n<p>The epicenter of the outbreak is Wuhan, one of China\u2019s largest manufacturing centers. Foxconn and Pegatron have operations there, as do memory manufacturers such as XMC (nor flash) and Yangtze Memory Technologies Co. (non-volatile memory).<\/p>\n\n\n\n<p>Auto producers, such as General Motors, Honda, Volkswagen, BMW and Daimler also populate the region.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p><em><strong>The electronics industry is poised for a cascading disruption that could change industry growth forecasts for the year. Bill McLean, president of semiconductor research firm IC Insights, said the virus has exacerbated the economic unease that has stalled semiconductor capital investment.<\/strong><\/em><\/p><p><em><strong>\u201cBrexit, trade issues and now the coronavirus are causing global uncertainty,\u201d he said\u00a0 at a Boston-based forum. \u201cUncertainty causes [businesses and consumers] to freeze.\u201d Worldwide, semiconductor capital spending is forecast to decrease by roughly 6 percent this year, from $103.5 billion in 2019 to roughly $97.6 billion.<\/strong><\/em><\/p><\/blockquote>\n\n\n\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Global Supply &amp; Demand Shock Of The&nbsp;Coronavirus Our analysis of the impact of the Coronavirus is a work in progress and nobody knows the endgame.&nbsp; It is still the early days of the epidemic, and its dynamics will take time to understand. The scale of the impact will depend on how contagious and lethal [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[28817,15450,1427,3237],"class_list":["post-50884","post","type-post","status-publish","format-standard","hentry","category-economics","tag-coronavirus","tag-global-macro-monitor","tag-supply-and-demand","tag-supply-chains"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50884","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=50884"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50884\/revisions"}],"predecessor-version":[{"id":50885,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50884\/revisions\/50885"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=50884"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=50884"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=50884"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}