The words"bear market" and"recession" are being used with increasing frequency as investors try to assess how badly the coronavirus outbreak will damage global growth and to what extent it could further weigh on asset prices.
As the virus has spread in the United States, investors have become increasingly worried about a number of factors, including what some have called an uneven government response, confusion about the number of cases in the country and concerns that fear of contracting the virus or government-imposed limits on movement will hit consumer spending and damage the economy.
"The market has only moved from being significantly overvalued ... to being modestly so," analysts at the bank wrote."Equities are yet to price in any drops in macro and earnings growth from the expected slowdown in activity." Michael Purves, CEO at Tallbacken Capital Advisors, said the tech sector"is still too strong" and added that"until we see some stronger selling in tech, we won’t be satisfied that late-to-the-party sellers are done."