Investors are accustomed to assessing risk, estimating the likelihood of potential outcomes and their impacts. But the coronavirus is a black swan, unpredictable and with an eventual outcome shrouded in uncertainty. I discussed this uncertainty during my recent Bloomberg appearance.
High-frequency economic indicators suggest the Chinese economy has yet to recover from the coronavirus, supporting anecdotal evidence of extended factory closures. Depending on how quickly activity returns to normal, the Chinese economy could contract at a double-digit pace in the first quarter, pushing annual growth down to just 3%.