What a difference a week makes. Since the S&P 500 peaked at 3,386 on Feb. 19, it has fallen by approximately 12 percent over the past seven trading sessions as the spread of the Coronavirus picked up outside of China. While 10 percent-type corrections are a normal occurrence across any economic cycle, 10 percent corrections over the course of barely a week are less so. In the some 10,000 trading days since 1980, there have only been 14 such week-long periods of losses exceeding 12 percent.

 

The impact of the coronavirus on corporate earnings and sales, whether among U.S. multinationals or companies headquartered elsewhere, will take a long time to sort out even if the contagion begins receding by early summer.

 

As companies begin to estimate the financial hit, this disease is proving far more difficult to assess than even the topsy-turvy trade risks between the U.S. and China were last year. The spread of the coronavirus carries with it many unknowns for multinational companies with complex global supply chains or meaningful sales in the hardest-hit countries.

 

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