Noisy Summer: Headlines May Be Obscuring a Persistent Recovery

While challenges related to the COVID-19 pandemic remain, evidence suggests that the post-crisis rebound can continue.


  • Markets may still be underestimating the historic fiscal support and unprecedented money support enacted by governments worldwide in response to the COVID-19 pandemic. Global commitments to these measures are enormous – including in Europe, where even a traditionally resolute Germany has agreed to the European Union spending package.
  • With fixed income yields likely to remain low, equities may be “the only game in town.” What’s more, the stock market is not the economy. The sectors arguably most damaged by the COVID-19 crisis and its aftermath – retail, restaurants, entertainment, airlines, cruises, and hotels – contributed only 7% of the S&P 500®’s total operating earnings in 2019.
  • In the United States, a “Phase 4” spending package will be a crucial component of the near-term economic recovery. The government’s response has been key to keeping American consumers afloat during the pandemic. The importance of addressing shortfalls to state and local government revenues is a major factor in the recovery’s trajectory. It is estimated they will need $550 billion in support.
This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. The analyses and opinions referenced herein represent the subjective views of the speaker(s) as referenced as of July 23, 2020 and are subject to change.

Investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income, and alternative investments.

Index information contained herein is derived from third parties and is provided on an “as is” basis. The user of this information assumes the entire risk of use of this information. Each of the third party entities involved in compiling, computing or creating index information disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to such information.

Index information is used to illustrate general asset class exposure, and not intended to represent performance of any investment product or strategy. It is not possible to invest directly in an index.

S&P 500® Index is a widely recognized measure of US stock market performance. It is an unmanaged index of 500 common stocks chosen for market size, liquidity, and industry group representation, among other factors. It also measures the performance of the large-cap segment of the US equities market.

3150699.1.1