Coronavirus, the Economy, and the Market

The coronavirus outbreak has continued to spread across the Globe in recent weeks, taking a toll on stocks and bond yields in recent highly volatile trading days. We continue to monitor the situation and learn as much as we can about the outbreak in order to assess its potential impact on both the U.S. and international economies. Of course, given the limited amount the scientific community still knows about the coronavirus, it leaves a wide range of outcomes as to its short and long-term impact on markets and economies globally. We always welcome an individual discussion to go over any of our clients individual portfolios, but in the meantime, we wanted to leave you with a few pieces of information we have found helpful recently. While the US economy has felt the ripples from the coronavirus, there are still just a limited number of confirmed coronavirus cases domestically.

The Bad
• While initially contained to China, larger outbreaks have popped up in South Korea, Japan, Italy, and Iran.
• Many company’s supply chains are based in China and seeing significant delays. This could lead to a shortage of certain goods globally and has led to many US and international companies revising their earnings forecasts down for the year.

The Good
• It is generally accepted that the US healthcare system is more advanced than China’s, as well as the other countries where most of the cases have been reported thus far. We are better equipped to deal with a potential outbreak.
• Federal funds have been made available to states in order to increase preparedness.
• While the US and global economic growth forecasts have come down this quarter, the full year impact is still expected to be modest at this time. Of course, should cases of the virus expand, that could change.

Of course, we know times like these are stressful no matter what and so we’d like to reiterate the fact that we are happy to jump on a call if you would like to discuss this further.