• As investors fret about the length and depth of the impact that COVID-19 could have on the global economy, U.S. stocks have seen a massive spike in volatility since hitting an all-time high just over two weeks ago.
  • Daily market swings of 2% or more have quickly become the norm. Altogether, the S&P 500 has fallen more than 10% from its peak while the 10-year U.S. Treasury yield, which has been plumbing new all-time lows daily, now sits comfortably below 1%.1
  • Major recent U.S. economic releases are mostly still coming in at or above expectations as they have not yet fully reflected potential COVID-19-related impacts. However, expectations for global economic and corporate earnings growth have weakened significantly as COVID-19 has spread.
  • Analysts at Goldman Sachs now expect no earnings growth for U.S. companies in 2020.1 Citigroup analysts lowered their expectations for global earnings this year from 4% to zero, noting that even zero may be too optimistic.1 The chart looks more broadly at analysts’ expectations through the first half of 2020. As it shows, earnings expectations, already marked down in late 2019, have tumbled since China announced the first COVID-19-related death.1
  • The ultimate earnings, economic and health impacts of COVID-19 remain a looming uncertainty. But a very likely outcome for markets seems to be ongoing, heightened volatility as new information drips out. Investors would be wise to prepare their portfolio for a sustained period of such volatility for the coming months and probably even quarters.

1 Bloomberg Finance, L.P., as of March 6, 2020.


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