Market Outlook · February 24, 2020

Economic Impact of the Coronavirus

Brent Ciliano

CFA | SVP, Chief Investment Officer

1 US & Global Growth Impact

We had believed pre-virus, that the deceleration in US consumer spending and migration of consumer’s paychecks to savings (US savings rates are approaching a whopping 8% thru January 2020), would drive US growth lower, and that growth would come in below both the Wall Street consensus of 2%, and this economic cycle’s trend growth of 2.3%.

2 Corporate Earnings and Profitability

As of 2/14/20, per Factset Research, 364 of the S&P 500 companies have reported earnings for 4Q2019 (~77%). 138 out of 364 companies have mentioned Covid-19 in either their analyst call and/or forward guidance.

3 Fixed Income and Rates

Yields across the entire Treasury curve are plummeting, and the curve is ever flatter. History today will have likely been made.

4 Global Equity Markets

As of 2pm on 2/24, US equity markets as represented by the Russell 3000, have fallen intraday by almost 3.3%, basically erasing their entire year-to-date 2020 gains (as of 2pm, YTD +0.36%).

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