The Financial Post reports in its Wednesday, March 18, edition that the coronavirus shockwaves rippling through U.S. stocks are forcing investors to contemplate outcomes more dire than a recession, including several quarters of declining economic activity, a credit crisis or even a depression.
A Reuters dispatch to the Post reports that the rising global toll from the pandemic and the uncertainty over how far it may spread have left investors and economists scrambling to gauge the financial fallout.
Manulife Investment Management global chief economist Frances Donald says: "This market looks like it has already priced in most of a garden variety recession. It is now on top of that having to price in some probability of a credit crisis."
Forecasters at Goldman Sachs and other banks are now projecting a steep economic contraction in at least the second quarter as governments in the United States and Europe start shutting restaurants, closing schools and calling on citizens to stay home.
However, there is hope among some economists that economy will start expanding again later this year -- depending in part on efforts to contain COVID-19.
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