ECB’s Makhlouf: There is a potential for a negative shock to growth, stock prices and the euro on coronavirus

Comments by ECB governing council member, Gabriel Makhlouf:

  • Coronavirus impact adds to already existing uncertainties and risks
  • It is premature to reach any conclusions
  • But there is potential for a negative shock to global growth in the short-term
  • Beyond that, we must wait and see but recognise that uncertainty has increased

The potential consequences of an epidemic of the coronavirus should be considered. Investors are largely ignoring the fears, but it should be remembered that it is too early to ignore the risks for both the global economies and the stock market.

Markets may be right and this “miracle goes away in three days”, but the actions and consequences of the virus have a direct negative impact on the business of many companies, which will also be transmitted to the economies of the countries. It is very likely that in the next earning reports we will see a decrease in profits, respectively, and share prices, and as a result decrease in the entire stock market.

 Head of Trading Dimitar Kalapov

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