- As a result of the COVID-19 pandemic, the global economy was hit with a supply shock that spread to a demand shock – compounded by an oil shock. The stock market peaked in mid-February on the coronavirus news and sold off sharply as fears of an economic slowdown morphed into fears over a financial market meltdown. The US Federal Reserve’s March 23rd announcement of aid measures helped to short-circuit the spiraling negative feedback loop, backstopping the credit markets and eliminating the risks that an economic crisis was morphing into a financial crisis.
- As states across America reopen, the recovery is expected to be slow and uneven. Risk of a second wave of COVID-19 cases is significant.
- As of early May, the largest stimulus in history is battling the sharpest slowdown in history. Economic fundamentals are vying with market technicals, and it appears that market technicals and stimulus are winning thus far.
There can be no assurance that developments will transpire as forecasted. Actual results may vary. The views and opinions expressed are as of May 8, 2020 and may change based on market and other conditions.
Natixis Distribution, L.P. is a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers.