<aside> 💡 submitted 3/15/20
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Goldman Sachs just held a conference call for clients with their forecasts for corona impacts globally. 1,500 clients were on the conference call. Highlights follow.
Mortality rate 2%, meaning 3 million Americans will likely die. Most of those will overlap with elderly who would have died in near term. Though them dying earlier will stress health care system.
There is a debate as to how to address the virus pre-vaccine. The US is tending towards quarantine. The UK is tending towards allowing it to spread so that the population can develop a natural immunity.
Quarantine is likely to be ineffective and result in significant economic damage but will slow the rate of transmission giving the healthcare system more time to deal with the case load.
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the second half of the year.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalised. It is more like 9/11 than it does like 2008.
The Private Goldman Sachs Coronavirus Meeting That's Setting The Internet On Fire