American business is practically obsessed with the idea of growth, and while growth is good, it is as much a marketing ploy as it is something that cannot happen perpetually, in spite of corporate assertions to the contrary. American business loves “growth” because it gives them a “reason” to market more stuff people do not need to them. Likewise, it also obscures a sordid truth, for ff the “growth” lie was to stop, the real state of the economy would be exposed, and it would cause a lot of problems.
That said, it is of great interest that Goldman Sachs, for all of the bad things they have done, has issued a report saying the expect ZERO “growth” this year because of the coronavirus outbreak as reported by CNBC.
Earnings growth for U.S. companies will be stagnant in 2020 as a result of the coronavirus, according to Goldman Sachs.
The Wall Street firm revised its earnings estimate for the year to $165 per share from $174 per share, representing 0% growth in 2020. That is a dramatic move from the consensus. Forecasts still expect earnings to climb 7% this year.
“US companies will generate no earnings growth in 2020,” Goldman’s chief U.S. equity strategist, David Kostin, said in a note to clients Thursday. “We have updated our earnings model to incorporate the likelihood that the virus becomes widespread.”
U.S. equities have been in a tailspin this week on fears that the deadly virus will dent global economic growth. The rapid spreading of the virus across multiple continents has caused the Dow Jones Industrial Average to drop more than 8% since Monday. The S&P 500 lost about 8.6% and the Nasdaq fell nearly 2.9% in the same period. (source)
Pay attention to this report. This means, at least from public perception, there will be significant declines in markets that if they do not lead to a recession, they will cause enough instability in markets that it will lead to rapid price fluctuations and possibly, political instability.
It could not come, in truth, at a better time for Trump, who lacking any real political platform, will resort to blaming the “Socialist Democrats” for “supporting Chinese Communism” in order to help put himself back into office.