Earnings estimates are plummeting in Europe. Here's what that means for the US

Earnings estimates have been plummeting in Europe, which has been hard-hit by coronavirus.

The concern is that should the virus spread in the U.S. as it is spreading in Italy, U.S. earnings could see similar declines. The impact is more pronounced by Industry. Industrials, expected to see earnings gains of 5% at the end of January, are now expected to be down 17%. Even consumer staples, expected to be up 17% at the end of January, are now expected to be down 7%.

"There is no doubt there will be a hit to growth, but I don't believe we will be seeing economic Armageddon," Nick Raich, who tracks corporate earnings at Earnings Scout, told me. "We may see some shutdowns, but once we get the virus contained growth will return."So far, most economic analysis of the economic impact is based on events like SARS and MERS, all of which had an impact of only two quarters.

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