The stock market is not the economy, the old saying goes. But it didn’t feel like it Monday.

Oil dropped 24% in a single day, the worst since the Gulf War in 1991. The Dow Jones Industrial Average shed a stunning 2,014 points, the S&P 500 tanked 7.6% and the tech-heavy NASDAQ plunged nearly 7.3% — all signals investors believe the spreading coronavirus carries broadly negative implications for the economy at home and abroad.

Hometown General Motors Co. slid nearly 14% and a share of Ford Motor Co. could be had for roughly the cost of a coupla nonfat lattes at Starbucks, closing at $5.90. The upshot is growing concern the market unease could spread to would-be consumers, slowing the go-go U.S. market of nearly the past decade and testing the ability of Detroit's automakers to weather a downturn.

Absent a clear plan and measured reassurance from the White House, the uncertainty is forcing investors to reassess the outlook for growth, corporate earnings and likelihood the collateral damage could tip the U.S. economy into recession just in time for a presidential election. Fear is palpable, exacerbated by confusing signals from President Donald Trump playing scientist and scientists struggling to correct the record.

The speed at which it's all happening is breathtaking, proving two things: One, that the interconnected global economy is a fact of life. And that reality is not easily unwound by populist fervor for Trump in United States, Brexit in the United Kingdom and renewed nationalist sentiments in western Europe.

Second, that the digital information age enabled by the internet and smartphones turbo-charges the trends; magnifies the voice of a president predisposed to popping off on Twitter — "Good for the consumer, gasoline prices coming down!," Trump tweeted. "So much FAKE NEWS!" And it empowers efforts at misinformation that easily can turn anxiety into panic.

"February 2020 will mark a turning point in the U.S. economy," Comerica Bank's chief economist, Robert Dye, wrote in a note published before the markets closed Monday. "Economic data collected prior to the end of February shows a strong U.S. economy on the firm foundation of a healthy household sector.

"Data from March, which will be visible in April and beyond, will begin to show us the impact of the global coronavirus outbreak. ... The outbreak, and our reaction to it, is already weighing on the U.S. economy in four ways."

First, "global demand destruction" as businesses and plants in China shut down for an extended New Year's holiday in a bid to corral the virus outbreak was traced to the city of Wuhan. Second, production stops slowed global supply chains already stressed by the Trump administration tariffs on Chinese-made goods.

Third, the impacts of interrupted Chinese production and the country's slowdown of imports from abroad, including the United States, raised fears of slowing growth that heightened anxiety on financial markets. The result: a dizzying selloff from highs reached on Feb. 19, less than three weeks ago.

Fourth, growing concern that "demand destruction" inside the United States by consumers who chose not to fly, to use taxis and ride-hailing services, to attend conferences and public events will slow growth and undermine both business and consumer confidence.

And the production shutdown of Boeing Co.'s 737 Max airliner, now a year long, is rippling through a supply base staring at an uncertain future. Add the global demand destruction caused by coronavirus and financial market volatility, and the result could be what economists call "three coincident events to knock the U.S. economy into recession."

"We are forecasting a very cool, but positive, growth for the U.S. economy through the first half of 2020," wrote Comerica's Dye. "We have increased our subjective probabilities of recession due to increased downside risk for the U.S. economy. We expect to see an above-trend rebound visible by early 2021. However, it would be an oversell to call it a V-shaped recovery."

The implications of such economic turmoil on the looming presidential election cannot be overstated. A celebrated CEO before his improbable 2016 win, Trump places enormous political importance on the performance of American equity markets — effectively considering their performance a proxy for his own.

When they're up, as they've been pretty consistently since his inauguration, he's good. When they aren't, especially over the past two weeks, not so much. But he's not alone, frankly: the fortunes of Detroit's automakers, too, closely track the national economic mood.

I'm sure I'm not the only one around here to shudder at confirmation that the last time oil prices dropped so far in a single day was in the run up to the first Gulf War. That's what helped precipitate a crisis at GM that culminated in the boardroom coup of the early 1990s, a faint harbinger of the bankruptcy reckoning in 2009.

Today is not then. But it's nonetheless shaping up to be a challenge that will test the mettle of leaders from Washington to Detroit and beyond.

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Daniel Howes’ column runs most Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN. Or listen to his Saturday podcasts at or on Michigan Radio, 91.7 FM.

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