COVID-19 is a Black Swan
The Coronavirus (COVID-19) is a “Black Swan” event. This unexpected and hard-to-predict event was not within the range of normal expectations. Nonetheless, it will result in a severe economic contraction on a global basis in 2020. While the magnitude of the human tragedy is still unknowable and outside the realm of our expertise, the economic and financial impact is coming into view.
Other highlights include:
- Infection rates are slowing in China but still rising outside China.
- Companies are announcing that revenues and earnings will be negatively impacted by both demand and supply issues.
- If COVID-19 is contained by the end of September, stocks will, in our opinion, begin to reflect or be priced on normalized 2021 earnings power.
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