Economic & Market Implications of COVID-19 Coronavirus/COVID-19: - - PowerPoint PPT Presentation

April 2020

Economic & Market Implications of COVID-19

Coronavirus/COVID-19: 2,518,275 Cases; > 200 Countries

Source: John Hopkins; New York Times Data through 4/20

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures.

Global COVID-19 Statistics

Source: Bloomberg; Boston Partners

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures.

Country Level COVID-19 Statistics

Source: Bloomberg; Boston Partners

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures.

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures.

The U.S. Leads in Tests Administered, but Lags in % of Population Tested

Source: Longview Economics; Boston Partners Data as of April 20th

Source: Bloomberg; Boston Partners

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures.

COVID-19: A Sign of Improvement – Confirmed Cases

Source: Bloomberg; Boston Partners

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures.

COVID-19: A Sign of Improvement - Deaths

Source: Bloomberg; ECRI: Boston Partners

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures.

Leading Economic Indicators Have Collapsed

Individual U.S. GDP Forecasts: “V”, “U” or “Fish Hook” Recovery

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures. Source: Bloomberg; Boston Partners Data as of April 8, 2020

IMF Expecting a “V” Global Economic Recovery

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures. Source: State Street; International Monetary Fund

Unprecedented Federal Reserve Response

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures. Source: St. Louis Federal Reserve; Wall St. Journal; Bloomberg

Unprecedented Global Monetary and Fiscal Response

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures. Source: Bloomberg; HSBC; Cornerstone Macro

Financial Stress Factors Initially Spiked but Have Fallen Since

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures. Source: St. Louis Federal Reserve; Boston Partners

Volatility Initially Spiked to Record Highs but has Since Receded

Source: Bloomberg; Boston Partners

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures.

From the 2nd Longest Bull Market to the Fastest Bear Market Since WWll

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures. Source: Ned Davis Research; Financial Times; Boston Partners

Downward Revisions for S&P 500 EPS, P/E Multiple Contracts

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures. Source: FactSet Source: FactSet; Boston Partners

2020 Earnings in Most Sectors Set to Fall, Energy Hit Hardest

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures. Source: FactSet Source: FactSet; Boston Partners

Consensus Earnings Are Projected to Rebound in 2021 for the S&P 500

Source: FactSet

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures.

S&P 500 EPS and P/E Declines During Recessions

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures. Source: FactSet; Goldman Sachs; Credit Suisse

S&P 500 Price Reaction: Most Similar to Lehman Bankruptcy During GFC

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures. Source: Bloomberg; Boston Partners

After a 50% Retracement of Max Drawdown, What Next?

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures. Source: Bespoke Investment Group

U.S. Bear Markets Since WWll

Source: Citigroup; Boston Partners

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures.

Length of U.S. Recessions

Source: Bloomberg; Boston Partners

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures.

Is the Worst Over?: The Stages of Investor Psychology

Source: Modern Time Investors

Boston Partners 

Past performance is not an indication of future results. Please refer to the appendix for other important disclosures.

Conclusions 1 COVID-19 “Curve” Ascending at a Decelerating Rate 2 Large Dispersion of Economic Forecasts 3 Monetary and Fiscal Responses Should Temper Recession 4 Stock Market Already Pricing In a Recession 5 “V” Recovery of Economy Unlikely, Stock Market ???