Quote:
Originally Posted by TwistedChief
I am no expert in equity space, but I very much think the situation is going to get meaningfully worse and feel there's better than a coin flip's chance that there's a major panic in the US (read: store shelves empty, etc) over the next few months. I'm hardly a 'Chicken Little' in these situations, but I think the cat is out of the bag in terms of global containment. And the asymptomatic nature of transmission is just a really dangerous feature that makes it tricky for governments to navigate.
I also think it's possible/likely this lingers over the balance of the year and is a major factor in the election. That isn't good for Trump and probably would play into the hands of a candidate like Sanders who is advocating for universal health care at a time when a lot of people are sick and worried about the cost of coverage. And that wouldn't be good for equity markets either.
I very much hope that I'm wrong. Feel free to bump in a year when Trump is president, the virus has been forgotten, and SPX is 4000.
EDIT: Just wanted to add that markets have already done a lot of work in this direction. My speciality is fixed income and today we briefly reached the lowest 10y Treasury yield in history. Relatedly, the near-term (say, 3-6m) Fed rate path is priced aggressively but probably pretty fairly given the risks I laid out above. So it’s entirely possible that the market has spent the last two days waking up to this situation and now can find some time to consolidate and see if the worst fears actually realize.
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CDC came out today and said to expect this to be "bad."