David Bailin, chief investment officer at Citi Private Bank, said company earnings could fall by 40% “across the board” in the second quarter.

Major U.S. stock indexes may have recovered from their recent lows, but Citi Private Bank warned on Monday that the worst may not be over.
“In the event that we have a very significant second wave of disease in the United States that cause a further shutdown of the economy … that clearly is not priced into the market,” David Bailin, the bank’s chief investment officer, told CNBC’s “Squawk Box Asia.”
“The other thing that may not be priced into the market is the fact that this virus may take another 18 to 24 months to really cycle through the globe, and ultimately have a vaccine,” he added.
The coronavirus pandemic has infected over 2.4 million people globally, with the U.S. reporting the highest number of cases worldwide  around 760,000, according to data compiled by Johns Hopkins University.
The rapid spread prompted states across the U.S. to impose lockdown measures of varying degrees, which caused unemployment to spike as businesses struggle to stay afloat.  
With the pandemic potentially dragging out a lot longer, Bailin said he has “significantly” lower expectations for company earnings compared to most analysts. He explained that the degree to which the coronavirus pandemic hit businesses in March would “hint” at what will happen in the coming quarters.
“In the second quarter we expect earnings to literally fall by 40% or more across the board, and we don’t expect earnings in the United States to get back to their first quarter levels for nine quarters from now,” he said.  
That doesn’t mean that investors should stay out of U.S. financial markets. Instead, Bailin said there are some good opportunities in the markets stateside.
The CIO said that for stocks, U.S. financial institutions have held up strongly in the crisis. In the bonds space, several high-yield names outside of the energy sector appear to be “very well priced,” and the “upper end” of the investment grade segment still looks “very attractive,” he said.
“I think there are plenty of places to seek yield and I think it’s important that investors seek that yield now because once this crisis passes  six months, 12 months, 18 months from now I expect that these spreads on these bonds are going to definitely retreat,” he said.