INSUBCONTINENT EXCLUSIVE:
Is it good news to say that stocks fell less sharply than they had on previous days?
That the bright side of another turbulent trading day
across the Nasdaq and New York Stock Exchange
The major indices were down again — although their declines were less severe than they had been during the week.
Investors appeared to
shake off positive labor statistics (the United States added 273,000 jobs, ahead of expectations), as the expanding number of coronavirus
cases in the United States and lack of a coordinated response from the Trump administration took their toll on investor confidence that the
impact on the economy would be minimal.
With that said, things could have been worse.
The Dow fell 256.50 points, or just under 1%, to close
at 25,864.78, while the S-P stumbled 51.57 points, or 1.7%, to close at 2,972.37 while the Nasdaq slid 1.8%, or 162.98 to close at 8,575.62
The benchmark indices are in the territory of a market correction — hovering at around a 10% loss already on the year.
For startups, it
important to note that these market pressures can have implications for their businesses
Jittery buyers may be inclined to curb spending and save to conserve cash on their own balance sheets; consumers may rethink priorities and
focus on essential purchases as they tighten their own belts.
Sequoia Capital warned in a blog post yesterday that things may change as
time rolls along and the global economy stutters.
Here their take:
Drop in business activity.Some companies have seen their growth rates
drop sharply between December and February
Several companies that were on track are now at risk of missing their Q1 2020 plans as the effects of the virus ripple wider.
Supply chain
The unprecedented lockdown in China is directly impacting global supply chains
Hardware, direct-to-consumer and retailing companies may need to find alternative suppliers
Pure software companies are less exposed to supply chain disruptions, but remain at risk due to cascading economic effects.
Curtailment of
travel and canceled meetings
Many companies have banned all &non-essential& travel and some have banned all international travel
While travel companies are directly impacted, all companies that depend on in-person meetings to conduct sales, business development or
partnership discussions are being affected.
This isn''t the first time that one of the country most successful venture capital firms has
warned its portfolio about the possibility of an economic crisis
In the wake of the 2008 financial crisis the firm issued an infamous slide deck warning &RIP Good Times.
For financial markets the funeral
bells are already tolling in the early part of the year
Now, a reckoning may be coming for startups that were on the edge of the bubble.
