The Globe and Mail reports in its Monday, March 2, edition that investors are bracing for more market turmoil this week as uncertainty swirls over the spread of COVID-19 and the impact it is having on the global economy.
The Globe's Niall McGee writes that stock markets in Canada and the United States are coming off their steepest declines in more than a decade. Last week, the S&P 500 fell by 11.5 per cent, and the S&P/TSX shed 8.9 per cent of its value, the worst weekly showing since the 2008 financial crisis. Mr. McGee says both indexes are firmly in correction territory, with Canada hitting that level in a shorter time period than ever before.
The pressure on stocks is being driven by fears that COVID-19 may end up having a much more damaging impact on the global economy and corporate profits than first feared.
Manulife Investment Management economist Frances Donald says: "The coronavirus is in many ways a black-swan event, one that we couldn't see coming, and one that is exceptionally difficult to measure. It launches us into a period of extreme uncertainty."
A black swan, a term first coined a decade ago, is an event that is rare, impossible to predict, but one which can cause catastrophic damage.
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