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How much further will markets fall as Covid-19 spreads?

As uncertainty increases over future growth, investors may turn more risk-averse and demand a higher premium, leading to lower company valuations and affecting market prices.

At the end of March 3, the authors' model-based macroeconomic analysis indicates that US equities could drop a further 11 per cent.

THE novel coronavirus Covid-19 has now spread to dozens of countries - at steep human cost - and many equity markets recently recorded their worst short-term losses since 2008. But how much further could markets drop? The answer may depend on growth expectations and the degree of risk aversion...

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