Investment Commentary - Implications of COVID-2019 for client portfolios - February 2020

Having appeared resilient in the face of emerging concerns about the Covid-2019 outbreak in January 2020, equity markets have fallen sharply over the past week (and continue to fall at the time of writing). The sharp declines appear to have been triggered by news that the virus was beginning to spread rapidly outside China, particularly in South Korea and Italy.

Apart from the human costs, from a financial market standpoint, the concern is that the outbreak will constrain economic activity and dampen corporate earnings. Indeed, many companies have revised revenue and profit forecasts lower in recent days.

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