GoldmanSachs---no growth for 2020

Posted on: February 28, 2020 at 09:59:52 CT

Goldman Sachs (GS) shocked the market this morning when lead-analyst David Kostin downgraded 2020 EPS growth to zero. I say shocked because the market was already spooked. The spreading coronavirus threatens to shut down the global economy in a way the trade war never could. Supply chains around the world are in danger of disruption if not break-down and that will surely have an impact on revenue and earnings.
“Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity, and elevated business uncertainty … A more severe pandemic could lead to a more prolonged disruption and a US recession” In this case, S&P 500 earnings could fall by double-digits in 2020.