Description: Over the last few weeks, these Weekly Updates have featured a couple of stories on the impact of the Corona Virus on business: one dealt with how Canada Goose believes that the virus will impact its sales in China, and another talked about the impact of the illness on the travel industry. Now, stock markets have dropped for six days in a row in anticipation of negative impacts on business in general. No sector on the TSX seems to have escaped the wide swath of decline.
Date: February 28, 2020
1) Do you normally discuss market trends in any of your university classes? Have the last few days been any different?
2) Why does fear seem to be so hard on the stock markets?
3) Starting on page 565 of Wiley’s Understanding Financial Accounting we learn about the Price/Earnings Ration (P/E). What would be happening to the P/E ratios of most firms during this market decline?