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Scott Minerd, founding managing partner at Guggenheim, at WEF in Davos, Switzerland on Jan. 22, 2019.

Adam Galica | CNBC

Guggenheim Partners Global CIO Scott Minerd said Wednesday that stocks could have further to fall as the markets came to grips with the economic impact from the coronavirus outbreak.

Minerd, appearing on CNBC’s “Closing Bell,” said the effects of the virus would soon begin to appear in corporate earnings and the global supply chain. Several major companies, including Microsoft, have warned that they will miss guidance due to the outbreak. 

“When you consider the scale of the epidemic at this point, it’s hard to believe that we aren’t going to start running into major supply chain interruptions and also start seeing more pressure on earnings and free cash flow for corporations,” Minerd said.

Those negative effects would be amplified if there is a significant outbreak in the United States, Minerd said. 

“I think we’ve reached a tipping point here, and that is if we can’t get this thing contained soon — that is, probably sometime this week — then it’s going to come to America. And once it comes to America, then we have an even more severe problem on our hands in terms of earnings and employment,” Minerd said.

Minerd said in a tweet during Tuesday’s sell-off that it was not time to buy the dip. Markets sank again on Wednesday, with the S&P 500 falling 0.38%. 

Minerd, who has previously said he expected U.S. stocks to rise between 10% and 15% this year, said it was too early to revise that forecast. He also said investors looking to hedge should consider bonds and precious metals like silver in this environment.

“The real signal to me will be the S&P breaks below 3,000, and then at that point … I would probably start revising my outlook for the year,” Minerd said. 

In a note to clients two weeks ago, Minerd said that “we are in the ludicrous season” because markets had not yet reacted strongly to the coronavirus outbreak.

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