The trillion dollar question for markets on coronavirus

Right now, the markets are, to a certain extent, pricing in the hope that it will start to fizzle in another month or two. If it does, China’s factories will be able to start humming again, restoring the supply chain, and starting to recover. Throughout the world, consumers will begin to unleash pent up demand for goods and services. People who have had cabin fever will start to travel and pursue leisure activities again. Markets will likely start to recover again.

But if it persists through the summer, that becomes a much different beast. There will be no time to regroup. Many businesses will have burned through inventory, and the supply chain will be indefinitely disrupted. Businesses that could perhaps survive a few down months will start to fail.

And markets will react accordingly.

So, buckle up for the next few months. And hope and pray that warmer temperatures will come to the rescue.