Another day, another drop in the U.S. stock market’s early trading session as forecasts for growth look worse by the day due to coronavirus fears. The outbreak started to affect technology companies as well as forecasts show a decline in trailing earnings and future results.
President Donald Trump’s speech last night failed alleviate concern of the global and domestic impact of the coronavirus. This was confirmed by the Dow Jones Industrial Average in the morning by going down 650 points.
Stocks of software companies are also trading lower and lower with the Bessemer-Nasdaq cloud index down by 1.5% and it doesn’t look like it’s going to become any better in the days to come.
The report by Goldman Sachs however illustrates a worst-case scenario in which the virus becomes widespread.
Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, 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
David Kostin, Goldman Sachs chief U.S. equity strategist
