Trump: Stock market will recover from coronavirus fears
President Trump isn’t concerned about the recent dip in the stock market and says the American consumer is very strong.
The rapidly spreading coronavirus is set to wipe out profit growth for U.S. companies this year, according to Goldman Sachs.
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The outbreak will result in S&P 500 earnings holding at $165 per share in 2020, down from a previous estimate of $174, the Wall Street firm predicted.
“Our reduced profit forecasts reflect the severe decline in Chinese economic activity in the first quarter, lower end-demand for U.S. exporters, disruption to the supply chain for many U.S. firms, a slowdown in U.S. economic activity, and elevated business uncertainty,” wrote David Kostin, chief U.S. equity strategist at Goldman.
CORONAVIRUS OUTBREAK INTENSIFIES RECESSION WORRIES
The coronavirus, which originated in Wuhan, China, has sickened at least 81,109 people globally and killed 2,762, according to the latest figures from the World Health Organization.
Hundreds of millions of people have been locked down in China, paralyzing supply chains and causing companies to temporarily shutter their doors or reduce operations. Additionally, airlines have canceled flights to and from China, schools have been closed in Japan and Saudi Arabia has canceled pilgrimages to Mecca and other holy sites.
WHAT IS A SUPPLY CHAIN?
The fallout has run deep among U.S. companies that do business with China, particularly among those that rely on production inside the country.
On Wednesday evening, Microsoft warned that delivery of parts for its personal-computing unit, which accounts for about one-third of revenue, has been impeded more than previously expected. The warning follows similar comments from tech giants Apple and HP, and may be just the beginning.