How bad will the COVID-19 recession be?
The real question is perhaps perhaps not whether you will see a recession, but just just how deep and exactly how long – and whether investors look set to be disappointed or relieved.
As COVID-19 continues to distribute, issue has quickly shifted from whether you will have a recession that is global how lousy the recession should be. Might it be deep but quick? Or deep and extended? As investors, the question that is next need certainly to ask ourselves is really what may be the marketplace priced for. And certainly will it is relieved, or disappointed?
Within our view, the seriousness of the downturn will probably be determined by three facets: enough time it will take for the disease become included, the pre-existing weaknesses into the international economy, in addition to worldwide policy reaction.
The most difficult among these to analyse confidently is the length of time it takes for the virus become contained and also for the importance of travel limitations and social distancing to reduce. [Read more…]