Big Data Thinking of Economy, Investment, and Business in COVID-19

Introduction

From December 2019 to January 2020, when the US-China trade war and Brexit were turning white-hot, anxiety has become the dominated sentiment due to the significant impact on the global economy. Despite a moderated economic growth predicted by IMF, the overall market sentiment seemed cautiously optimistic. However, only a few days later, the COVID-19 outbreak changed the story line unexpectedly. As fear, panic, uncertainty, and rational assessment are combined together, revenue and profits of hundred thousands of companies are expected to be lower than ever since the beginning of the pandemic. Such the inference is initially reflected in the capital market, when the US stock market was crashed suddenly on February 20, 2020. $5 trillion in values of the S&P 500 index have been lost in the week from 24th to 28th of February, while global markets shrank nearly $6 trillion in wealth in the same week (Mazur et al., 2021). The tourism industry was affected by COVID-19 significantly, according to the International Air Transportation Association (IATA) predictions that the air travel business would lose hundred billion dollars as the Chinese travelers were restricted by the stay-at-home policies and travel bans (Suau-Sanchez et al., 2020). The spillover of COVID-19 has also impacted the global economy throughout a variety of industrial sectors and market participants, such as hospitality, sports, oil-dependent countries, import-dependent countries, banks and FinTech, etc. (Ozili & Arun, 2020). In a word, the COVID-19 pandemic has caused a huge amount of economic losses and is evolving into the next great recession.

The sharp reduction in economic activity associated with public disease control measures will also result in millions of job losses. The labor market is undergoing tremendous pressures due to the efforts of the stay-at-home policies, immigration restrictions, nonessential business closures, and reductions of demand in products and services. As such, economists have estimated over 20% decline of GDP in the U.S. on an annual basis, while more than 95% of the domestic economy is impacted by the mandatory closures in almost all states (Walmsley et al., 2021). The negative impact on economy rapidly transformed in investment markets, along with a sharp sell-off in Treasury markets (Schrimpf et al., 2020). Aggressive actions have been taken as the interest rate is moving back to zero, issued by the U.S. Federal Reserve, which responded with a set of economic stimulus plans in terms of the actions targeting on relieving cash-flow stress for small and medium-size businesses. Such a monetary policy is successful in stimulating economic growth without significant effects on inflation, as markets no longer believe that even quantitative easing can bring inflation to target, which leaves few options for monetary policy apart from low interest rates (Feldkircher et al., 2021; Lilley & Rogoff, 2020). However, the COVID-19 outbreak seriously affects global economy through various economic issues, such as economic growth and uncertainty, bubble and burst, as well as risks in investment markets, thereby the macroeconomic impact from the COVID-19 pandemic has been becoming significant and prominent.