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Economic recovery will be a swoosh not a V.

Until recently, many policy makers and corporate executives were hoping for a V-shaped economic recovery from the coronavirus pandemic: a short, sharp collapse followed by a bounce back to pre-virus levels of activity.

Now, however, they expect a “swoosh” recovery.

Named after the Nike logo, it predicts a large drop followed by a painfully slow recovery, with many Western economies, including the U.S. and Europe, not back to 2019 levels of output until late next year—or beyond.

The sobering new view reflects the depth of the contraction now being recorded for the spring, as well as more evidence that soaring joblessness and months or years of social distancing—particularly in the West—will depress economic activity well into next year.

“This is not going to be a quick recovery,” said Mark Schneider, chief executive of Nestlé SA, the world’s biggest packaged foods maker, recently. “This is going to be a several-quarter, if not several-year kind of process.”

Are you comfortable with current valuations if it takes 24-36 months to return to current GDP levels?

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