The U.S. stock market continued its plunge Monday amid fears of a global recession due to the COVID-19 outbreak.
The Dow Jones closed down nearly 3,000 points, or 12.9%, its third-worst one-day percentage drop in history. The S&P 500 fell 12%, reaching its lowest mark since December 2018. The Nasdaq suffered its worst day ever and was down 12.2%.
Seattle-based companies hit the hardest Monday were Zillow Group (-23%); Expedia (-21%); Impinj (21%); and Redfin (-19%). Others including Smartsheet (-16%); Microsoft (-14%); Adaptive Biotechnologies (-13%); T-Mobile (-10%); Avalara (-9%); and Amazon (-5%) were also down, as well as Seattle-area retailers Nordstrom (-20%); Starbucks (-16%); and Costco (-6%).
The decline continues despite the Fed’s decision Sunday to cut interest rates to zero. At a White House briefing Monday, President Trump told reporters that the coronavirus outbreak could last through the summer and said the country “may be” heading into a recession.
Pacific Northwest companies may see varying economic impacts from the outbreak. For example, Expedia Group on Friday withdrew its 2020 full-year financial guidance, citing uncertainty with travel trends. RBC Capital Markets analyst Mark Mahaney predicted a decline of 18 percent, or more than $470 million, in the company’s first quarter revenue vs. the same period last year.
Amazon, meanwhile, is one of the companies that could benefit from the impact of the coronavirus, as work-from-home restrictions and other precautions cause more people to stay at home, relying on e-commerce for a larger percentage of their purchases. Amazon said today it is planning to hire an additional 100,000 warehouse workers to keep up with the volume of orders placed by customers. The company’s Amazon Web Services and Twitch businesses are among those that could benefit from increased online activity.
A survey from RBC showed that Microsoft businesses such as Azure, Skype for Business, and Microsoft Teams could help the Redmond, Wash.-based tech giant during the COVID-19 outbreak.
It’s unclear how the housing market will change over the next several months and affect real estate giants such as Zillow Group and Redfin. A recent Redfin survey found that about 40% of Americans think the outbreak will have a negative impact on the housing market. Redfin CEO Glenn Kelman said earlier this week that agents in the Seattle area had seen “a significant drop in demand,” amid concerns about the novel coronavirus, but cautioned that the long-term trend wasn’t clear.
Zillow published a research report last week that analyzed past pandemics and their effect on housing. For example, during SARS, Hong Kong home prices did not fall significantly but transaction volumes greatly subdued, which mimics what’s happening in China right now, according to the Zillow study.