March 11, 2020 glacierinvest

The potential pandemic known as Coronavirus or Covid-19 has taken the world by storm. The headlines and the shelves in your local Costco, Walmart or store of choice would lead you to believe we are approaching or are already in the midst of a major world crisis. I’m not suggesting we aren’t but I am suggesting that it’s important to get the facts straight and to be discerning between a sensational headline and an actual piece of useful and important information. To that end, I’m including two links in this post to write-ups I consider objective, fact-based and well thought out.

The first shares important details about the virus itself and in comparison to previous outbreaks. It provides important and what appears to be accurate perspective. It’s not alarmist in any way.


The second offers a perspective using European data. Importantly, the author states she is not concerned about her health or the health of her family. The people that need to be worried are the older and weaker individuals of the population. Unfortunately, these types of viruses wreak havoc on this segment of the population. The author also discusses the potential economic impacts, which could be severe. If commerce shuts down as governments and societies take protective measures to limit the spreading of the virus then economies will naturally suffer. It’s an unfortunate byproduct of the measures that need to be taken for public health safety purposes.

Macroeconomic Plague

My take is that the virus is serious enough that we all need to do everything we can to minimize it from spreading. Barring a major reversal in the current trajectory and trend of the virus, global economic activity will most likely continue to slow as governments institute measures to reduce the spreading of the virus. As a result, companies’ earnings are likely to take a hit and broader economic activity measures are likely to be weaker in the coming months. The question is whether all of this is already priced into the market and whether the actual results will be better than expected. Markets have a tendency to overshoot in both directions. However, is the news going to get worse from here? Like a stomach bug, the market needs to puke out all of the incrementally worse news before it can start to feel better and improve.