MSCI’s model assumes that short-term growth will drop by two percentage points and the equity risk premium will increase by two percentage points as investors respond to growing uncertainty about long-term growth.

Based on that scenario, MSCI says its model shows that along with U.S. equities potentially sinking 11% from the closing market price of March 3, a hypothetical 60/40 global multi-asset-class portfolio could lose roughly 7% while global equities could fall a little more than 10% and 10-year Treasury bonds could rise 2%.

“As the coronavirus spreads across the globe, investors are assessing the potential impact on the economy and their portfolios,” the MCSI report says. “As we show in our stress test, there is still room to fall for both U.S. equities and a global diversified portfolio. A longer-term shock could have more severe implications.”

First « 1 2 » Next