Big and Small Businesses Are Bleeding
By: Logan He
With coronavirus cases spiraling out of control and reopenings postponed, economic recovery is disrupted again. Businesses are feeling the wrath of the coronavirus.
This is destroying business plans and optimism from the CEOs. “I’m less optimistic today than I was 30 days ago,” said Arne Sorenson, chief executive officer of Marriott International, “The virus is in so many different markets of the United States.” This shows that the increase of cases is affecting businesses. This is also going to be an extended nightmare for the businesses that are already suffering like Delta, United, Hilton and Marriott just to name a few. Air travel, restaurants, and hotel businesses will all be in jeopardy and might go bankrupt. One exception may be chick fil a because there are always long lines waiting for food outside the restaurants.
According to Forbes, the unemployment level has skyrocketed up to all-time highs and this is a major concern to many economists. In the same time, prices have rebounded back up to pre-pandemic levels and the stock market has been going up ever since the March panic. The market is not reflective of the economy because of unlimited quantitative easing by the Federal Bank. We have become too reliant on unlimited quantitative easing so people will have the misconception of a bull market. This will result in a sudden drop in the stock market when the feds stop printing money.
All the momentum we gained from the boost of the coronavirus dying down in June has been lost. We will see a fallback in most businesses. “I have a more cautious view than I did four weeks ago,” said Bastian, the chief executive officer of Delta airlines. They now have to be way more cautious because they do not have as many resources and money to backup operations. And now with commercial flights halted they are relentlessly losing money. According to CNBC, the optimism in June was followed by the big jump when the carrier gained 41% to close at $16.72, the biggest one-day percentage jump since its merger with US Airways in December 2013. Sadly we will not see this anytime soon.
Small businesses are also feeling the toll after drinking up all the government funds set for covid-19 relief. “It was really, really great for us,” said Brigitte Edwards. She is the owner of OrangeTheory Fitness in Midtown Nashville, “But now we have exhausted those funds.” Many businesses need more money but they are not receiving it. With the economy down, should the government help the small business or not? These businesses hire people and steady the economy with jobs. If these businesses go bankrupt the number of jobs will plummet.