Coronavirus Set to Impact Corporate Profits

The video discusses the impact of a virus on earnings and market response, highlighting that analysts are slow to adjust their forecasts due to lack of company guidance. The main concern is the second quarter, with a predicted 5-10% decline in corporate profits. The probability of a recession is considered low, as the US requires two consecutive quarters of negative GDP and labor market deterioration, which is not evident yet.

What is the main reason analysts are struggling to adjust their earnings forecasts?

• They have too much information to process.

• They are focused on other economic indicators.

• They lack specific guidance from companies.

• They are waiting for government reports.

In which quarter is the major impact on corporate profits expected?

• Fourth quarter

• First quarter

• Third quarter

• Second quarter

What is one of the criteria for defining a recession in the US?

• Two consecutive quarters of positive GDP

• Two consecutive quarters of negative GDP

• One quarter of negative GDP

• Three consecutive quarters of negative GDP

What additional evidence is needed besides negative GDP to confirm a recession?

• Increase in stock market prices

• Improvement in labor market

• Deterioration in labor market and credit

• Rise in consumer spending

What is the likelihood of a prolonged recession according to the discussion?

• Moderate

• Very high

• Low

• Certain