U.S. stocks may fall another 11% due to virus damage-index provider MSCI

LONDON (Reuters) – U.S. stocks could be in line for another double-digit decline in the near-term because of damage from the spread of coronavirus, index provider MSCI said on Thursday, citing its scenario-based analysis,

“We’ve conducted a what-if scenario analysis that assumes a short-term drop in growth of 2 percentage points and a risk-premium increase of 2 percentage points,” Thomas Verbraken, executive director at MSCI’s risk management solutions research told clients.

“Our model indicates that, in such a scenario, there’s room for further short-term losses: U.S. equities — already down 11% from Feb. 19 through March 3 — could drop a further 11%.”

Verbraken said that if the global economy suffered only short-term pain, the market could bounce back. However, a hit to long-term growth trajectory which would also impact corporate earnings due to the pandemic could be felt over a much longer horizon.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.