We have been using our research platform to stay on top of the coronavirus developments for a few weeks now: on February 18, we wrote about using our deep search and collaboration capabilities for fast-moving news, and on February 24th, in Forbes and in our blog, we wrote about the spike in “work from home” mentions in corporate transcripts, and looked the affected equities. The “work from home” theme with our data has been picked up globally by The Washington Post, Vox, The Globe and Mail in Canada, SBS in Australia, publications in the UK, Croatia, and countless other sources.
As the pandemic situation unfolds exponentially, we started looking at what the CEOs specifically are saying in transcripts by using our popular in-transcript, said-by-the-CEO search and ML-based keyword suggestions.
Perhaps the most consequential word is deceleration (and related stemming, like decelerate or decelerated).
We are seeing mentions globally and across industries: here is the CEO of beer giant AB InBev on February 27th.
Black Swan is also making an appearance: the concept of an unexpected but highly consequential event was popularized by former options trader and current philosopher-flaneur Nassim Taleb in his eponymous book. We can clearly see that February 2020 was a standout month for CEOs talking about black swans during investor calls.
And, like deceleration above, it is global: from a Russian gold and silver miner to a US potash producer to Chinese ecomm giant Alibaba.
We are also seeing a major increase in transcripts where the CEOs talk about “supply chain” (exact match): February 2020 was a standout month, again, with over 800 transcripts. We can also see the existing trend in general as the trade wars were heating up but now supply chain is a front and center issue, discussed directly by the CEOs.
February 2020 transcripts also saw a spike in CEOs talking about postponing things. This is extremely concerning as CEOs collectively exercise control over trillions of dollars in aggregate project spending globally. We searched for postpone (with our automatic stemming, like postponed or postponement).
Once again, we are seeing a wide variety of industries and geographies. Just in the last few days, here is the CEO of Hugo Boss AG (apparel)
Geox SpA (footwear)
JCDeaux SA (global advertising)
Based on the linguistic trends of CEO language, we see a very large potential for a significant corporate-driven pullback in spending leading to a global recession. The volatility in the equity and fixed income markets, along with the widening of the credit spreads support this outlook as well. Below, we can see the VIX and 10-yr treasury vol at 2011 levels, with the CCC OAS spreads widening.
Originally Posted on March 8, 2020 – Coronavirus Impact: CEOs Are Seeing Black Swans and Deceleration
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