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%).