Coronavirus has spliced economy and health worldwide. Here, Vincent Juvyns talks to Lisa Burke about the economic shock and what the near future might look like.
The stock market drop in March was of a magnitude rarely seen in peace time. However, parts of the markets are richocheting unsteadily upwards once more.
Will financial 'recovery' be a V or U shape? Will there be a second wave of coronavirus? Possibly a W recovery? We will only know in hindsight. But some people have the job of predicting, based on all available data. That's Vincent's job.
Policy makers have acted fast, making unprecedented fiscal decisions to cushion the effects of social lockdown on businesses. The Eurozone is likely to further contract as the virus continues to spread, even if we have reached the (first) peak in some nations.
In the US, based on current earnings, the S&P 500 EPS is expected to decrease by 23% this quarter. The Bank of England also warns that the British economy might shrink by a quarter this Spring and unemployment could double. Interest rates across Europe remain very low.
Through this incredible financial distress for many, there have been some winners, whose USP suits those living and working from home: Zoom, Amazon, Netflix, to name some of the guess-ables. Bike sales are also thriving as people rethink their transport options, which also aids continued social distancing. We have been unendingly fortunate with the weather throughout this period too, here in Luxembourg - a further incentive for cycling.
So as we gingerly go forward, out the door and back to work, children off to partial-school, we do so without a vaccine, yet, a continuation of the virus and an overhang of debt. Social distancing saves lives; it kills the economy. Ultimately, and soon, we need this to change.
Vincent Juvyns is a global market strategist in Europe, Executive Director with J.P. Morgan Asset Management. He looks after clients in Benelux, France and Geneva providing them with market and economic analysis around the year through 'Market Insights'.