Shortly before US stocks suffered another triple-digit point drop at the open – dampening the cheers of traders and pundits who gleefully celebrated stocks going positive for the week on Wednesday – MSCI warned on Thursday that another double-digit drop could be in store for US stocks, Reuters reports.

Like most other analysts, Thomas Verbraken, the executive director for risk management at the research and indices giant, said his risk models suggest that a short-term drop in growth of 2 percentage points, and an attendant drop in corporate earnings, could hammer stocks even lower, erasing much (but not nearly all) of the gains since President Trump’s inauguration.

“We’ve conducted a what-if scenario analysis that assumes a short-term drop in growth of 2 percentage points and a risk-premium increase of 2 percentage points,” Thomas Verbraken, executive director at MSCI’s risk management solutions research told clients.



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