COVID-19 - what can we learn from the past?

Mario Fisher, Chief Data Scientist and Head of Equities at Prescient Investment Management

The coronavirus outbreak has sent worldwide fear across financial markets amid concerns of a hit to the global economy.

Although it is still too early to evaluate the full impact on the economy, it is prudent to assume that there are still more potential downside risks posed by the outbreak given its unknown magnitude and duration. Global markets have reacted with a classic risk- off response and perceived safe-haven assets have benefited from increased demand. The impact from concerns about the outbreak may have been partially offset by:

• Positive results in the current quarterly earnings season (so far these are in line with market expectations)
• Some reprieve in global trade tensions
• Mostly positive economic data

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