MY VIEW: Is #coronavirus #risk #transitory? Nobody knows. Therefore we should be applying a higher #equity risk #premium when valuing #equities. And that is why #equilibrium equities prices are now somehow lower than a week ago.
Financial Times: "For now, it is still unclear how companies’ #supply #chains could be affected or how large a drag the #outbreak could be on growth globally."
Goldman Sachs: "Recent news reports suggest the coronavirus is moving from a #regional #public #health #crisis to a more #global
phenomenon. Although we cannot predict the path of the virus itself, we
do think markets will now need to price a wider distribution of
possible outcomes for the global economy. Investors should prepare for a
longer period of virus-related uncertainty and position portfolios for
the possible #macroeconomic #implications of the outbreak.... Our best guess is that the #drawdown in #risky #assets has further to go over the short run."
