Virus disrupts business, supply chains

Financial expert Tom Neumann of Drake and Associates says consumers could end up paying more for goods and services because of the novel coronavirus outbreak.

Adrienne: CORONAVIRUS STRIKESTHE ECONOMY.I’M ADRIENNE PEDERSEN.Today on "upfront," FEARS OF APANDEMIC ROCK FINANCIAL MARKETS.TODAY ON "UPFRONT," THE EFFECTTHE OUTBREAK IS HAVING ON THEECONOMY, AND THE ADVICE THEFINANCIAL ADVISERS ARE GIVING.PLUS, JUSTICE DANIEL KELLY.Justice kelly: I think that isan ugly slander because it isalive.Adrienne: HE RESPONDS TO HISOPPONENT’S STATEMENT THAT THECOURT FEELS CORRUPT.AND PREVENTING TEEN SUICIDES.THE PROGRAM BRINGING HOPE TOSCHOOLS.Announcer: taking on the issuesimportant to Wisconsin, this is"upfront," with your hostAdrienne Pedersen.Adrienne: thank you for joiningus.WE BEGIN TODAY WITH RISINGWORRIES OVER THE NOVELCORONAVIRUS, WHICH HAS NOWKILLED MORE THAN A DOZEN PEOPLEIN THE UNITED STATES.MOST OF THE DEATHS HAVE BEEN INWASHINGTON STATE, AT ASEATTLE-AREA NURSING HOME.NUMEROUS STATES HAVE DECLAREDEMERGENCIES.HERE IN WISCONSIN, CORONAVIRUSCASES SO FAR HAVE BEEN LIMITED,AND STATE HEALTH OFFICIALS SAYTHE RISK, RIGHT NOW, IS LOW.DR. WESTERGAARD: IT’S POSSIBLE,AND IN FACT, LIKELY THAT WE WILLDETECT ADDITIONAL CASES IN THECOMING DAYS OR WEEKS.Adrienne: YOU DON’T HAVE TO BEILL TO BE FEELING THE EFFECTS OFTHE CORONAVIRUS.THE OUTBREAK HAS ROCKED THEFINANCIAL MARKETS, AND IT’SAFFECTING THE ECONOMY.AIRLINES ARE LOSING MONEY, WHILESOME BUSINESSES HAVE CANCELLEDLARGE GATHERINGS OR ASKEDEMPLOYEES TO WORK FROM HOME.WE’RE TALKING MORE ABOUT THATNOW WITH TOM NEUMANN.HE IS A FINANCIAL EXPERT WITHDRAKE AND ASSOCIATES.Thank you for your time.Tom: my pleasure.Thank you.Adrienne: companies askingpeople to work from home, how isthis affecting business not onlyin the country but Wisconsin?Tom: it is important tounderstand that we are at theforefront of trying tounderstand what the impact isgoing to have, not only globallybut locally here.So governments and privatecompanies are trying their bestto prevent the spread of it, sowhat they are asking workers todo his work from home, like youmentioned, or even shutter theirdoors for a period of time, andthat could have dramatic impact.Companies could potentially loseout on profitability and salesover the short-term andlong-term and so that is whathas investors spooked right now.Adrienne: just to tell peoplethe scope of this.I was reading that they expect a$40 million drop in revenuebecause of the effect onsuppliers for a company inWisconsin.Tom: that is exactly it.The company has focusedprimarily in China, but it isexpanding globally with so manycompanies being worldwidecompanies now and they do focuson their supply chains comingfrom the countries like China,so when there are disruptionsand the people that are actuallyworking in China and notproducing at the same levelsthat they historically havebeen, this could have down theroad ramifications for companiesthat are here who rely on thatevery single day.Adrienne: and maybe you don’twork for a big company, but whatabout the consumers?How could we potentially feelthis?I know there are a lot ofunknowns.Tom: one of the biggest thingsis going there are disruptionslike this in the supply chain,often timeS that leads toservices and goods beingproduced at a lower level, andthat could have a ramificationon prices down the road.Adrienne: and Wisconsin isimporting and exporting.You do not want to scare people,but when it comes to the worstcase scenario, what could weexpect?Tom: we do not fully understandwhat this outbreak is going tohave on the global economy.I do remember in periods of timewhen we’ve experienced thisbefore.Maybe it was not virus-related.I think of a time like September11, where something like a shockto the economy happens and therewas a knee-jerk reaction frominvestors, and there was asignificant selloff.And rightfully so.People were concerned andfearful.At the end of the day, once weunderstood and we hadgovernments and communitiescoming together, then we sawinvestors, down, reenter themarket and we saw the marketincrease significantly.A lot of people are losing a lotof money.If you are taking a long-termperspective, which they shouldbe and you are setting yourselfup with a portfolio that is risktolerant to what you arecomfortable with, you should beable to withstand a marketcorrection like we are seeingnow.Adrienne: so many people aretalking about their 401(k)s and I was looking at mine withone eye open because I did notwant to see it and I saw abillboard warning people not topanic and drain your 401(k).What are you telling yourclients?Tom: it does drive investordecisions on a daily basis.We are seeing this marketcorrection driving it downward.We have had an unprecedentedbull market, so there was athought that we were due for acorrection and this may havebeen the spark to have ithappen.But it is important to work witha financial advisor that can sitdown with you, look at yourindividual holdings andunderstand the risk you arecurrently taking in yourportfolio and match that withyour risk tolerance again, andif you are able to do so, youshould be able to withstand thismarket correction and take thelong-term view rather than theshort-term view.Adrienne: I imagine it is adifferent level of concern forsomeone who was about to retireand lost money.What is your level of concernoverall with coronavirus and theeconomy?Tom: it is a concern to thepoint where we want to make surewe are understanding and stayingabreast of the developingchanges happening every day,but, you know, I work withpre-retirees and retirees, so bynature, they tend to be moreconservative, and we designportfolios that help to not onlywithstand market correctionslike this, but also going to amotive preservation rather thanaccumulation.It is important to take stock ofwhat your goals are, what yourtimeframe is, and match thatwith the risk tolerance that isappropriate.Adrienne: we need to beeducated.Tom: we do.Adrienne: Tom, thank you.Adrienne: COMING UP, MYINTERVIEW WITH SUPREME COURTJUSTICE DANIEL KELLY.Why don’t