So far pretty much everybody is overreacting, which has led to interruptions in many businesses around the world, which naturally leads to a market selloff. I think the market has reacted reasonably to unreasonable (so far) fear. As just one small aspect, I think it's terrible that people are hording face masks they will never need or use which very well could cause those who need them to have to go without.
Any business interruptions are localized and short term.
market drops 5% on a one day report of a few hundred to 1000 or so new cases on a planet with almost 8 billion people. Also a planet where 300-600k people die each year from the flu, 1.25 million people die from car accidents, 10 million people die from cancer, and almost 20 million people die from cardiovascular disease.
The global number of cases keep going up because the news reports cumulative total cases when the number of active cases is actually declining as people recover. Feb 17 there were almost 59k active cases in the world, the number is about 41k as of yesterday.
China shut down for a week for chinese new year, extended that a bit, have mostly reopened their production. They've had 2600 deaths in a country with 1.4 billion people.
Tesla, the company I follow who has production in china, has been back in production a few weeks, broke ground on construction on a 2nd factory in shanghai this week. They've also rented every delivery truck available to home deliver vehicles to customers in china.
Yes, we need to be diligent to keep the virus from getting out of hand. But the world didn't lose 18% of the economy because 4k or so people got sick in a week.
Also, the selloff hit companies that make no sense at all. For example, Amazon is down. If people are afraid to go out in public they are going to shop more online.