BEAUMONT, Texas — Southeast Texas is feeling the impacts from Wall Street.
If you've checked your 401-K this week, you probably had to cover your eyes.
This has been the worst week in market history since the financial crisis in 2008, driving stocks down roughly 13% in value.
"This could actually spiral and magnify out of control," said Dr. John McCollough, an associate professor of economics at Lamar University.
He says the Coronavirus has absolutely had an impact on the stock market, but he also believes it was overvalued before we started seeing the drop.
"A lot of investors might find that this correction was do for, but also after living through the great recession a lot of people now realize that the stock market always bounces back," McCollough said.
Dr. Mccollough says China is a big supplier of goods to American firms. He says if they don't get the Cornavirus under control, we could end up in another recession.
"If they can't get out and continue producing these supplies then our firms will find a shortage of their supplies," he said.
McCollough says this can lead to higher inflation, and higher unemployment rates.
"If the american firms can't get their supplies, then maybe they'll have to cut back on production, and to cut back on production they might end up cutting back on their labor force."
McCollough says this week's plunge can cause what's known as the "Wealth Effect."
"When people's wealth goes down, they begin to save more and spend less, and that's exactly what happened in the 2008 great recession," McCollough says.
This causes a negative impact on the economy. However, Dr. McCollough believes the situation we're in now is much more temporary than in 2008, and once large investors start to see the virus contained, money they've taken out will start trickling back in.
"Those that manage pension funds and 401K funds, they will then move all of this money that they've taken out of the market, and put it back in and you'll see the stock prices start coming back up again," McCollough explained.
Bridal and formal wear shops are one of the industries taking a hit.
Mommy Dearest Formal & Accessories in Beaumont, is one of the lucky ones. Owner, Tleshia Simmons, says she stays ahead of the game by ordering new inventory every week. She currently has about 1100 dresses in stock.
As of now, the only effect the coronavirus is having on her shop is preventing her from putting in rush orders. "If they need something within 6-8 weeks, they're out of luck."
Before manufacturers shut down, Simmons was able to request inventory to come in as soon as 6 weeks later, for a higher fee, but that's no longer possible.
Simmons says the earlier you start shopping for prom season, the more selection you'll have.