Bridges are built to safety transport people over a chasm. In the absence of policymaker action, the US economy was facing a COVID-19-induced chasm. With over 20 states implementing shelter-in-home orders, and even more temporarily closing non-essential business, vast pieces of our economy came to a screeching halt. With economic conditions deteriorating, policymakers responded with speed and precision metaphorically creating bridges to get us to the other side. The US economy will likely struggle temporarily, but the combination of aggressive monetary policy and substantial fiscal stimulus should deter the worst case scenarios from occurring. These efforts will serve as a ‘bridge’ to a place not too far in the future (hopefully June) where the virus is contained, a therapeutic response is developed and the economy returns to normality.
All expressions of opinion reflect the judgment of Raymond James & Associates, Inc., and are subject to change. Information has been obtained from sources considered reliable, but we do not guarantee that the material presented is accurate or that it provides a complete description of the securities, markets or developments mentioned. There is no assurance any of the trends mentioned will continue or that any of the forecasts mentioned will occur. Economic and market conditions are subject to change. Investing involves risk including the possible loss of capital. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. Companies engaged in business related to a specific sector are subject to fierce competition and their products and services may be subject to rapid obsolescence. Past performance may not be indicative of future results.
Commentary & Insights
March 17, 2020
COVID-19 has officially been declared a pandemic, pushing markets into bear territory. Explore timely market insights.Weekly commentary by Dr. Scott Brown