Riding out the Storm
By Ron Lentz
While the bad news plays itself out in the headlines, let us assure you of something: Our faith in American business remains unshaken.
The economic contraction occurring right now may get worse before it gets better, but the long-term outlook is the same as always: we will bounce back. The when & how are inherently impossible to predict, but it will happen as it has happened countless times before. In the long run, the only bet that you are sure to lose is a bet against American business.
But don’t take our word for it. Here is what the economists and analysts at three of the top global investment firms are currently saying:
BlackRock
“The scale of financial market moves in response to the coronavirus outbreak has been reminiscent of the global financial crisis. We do not think this is 2008, however. The virus shock’s impact will likely be large and sharp, but we believe investors should be level-headed, take a long term perspective and stay invested. The economy is on more solid footing and, importantly, the financial system is much more robust than it was going into the crisis of 2008.”
Goldman Sachs
“We expect declines in services consumption, manufacturing activity, and building investment to lower the level of GDP in April by nearly 10%, a drag that we expect to fade only gradually in later months. We now forecast quarter-on-quarter annualized growth rates of -6% in Q1, -24% in Q2, +12% in Q3, and +10% in Q4, leaving full-year growth at -3.8% on an annual average basis and -3.1% on a Q4/Q4 basis.”
Morgan Stanley
“Given the sharp drops in global asset markets recently, the coronavirus could deliver a sizable impact to global growth in the first half of the year. However some clear perspective on the outlook for the full year is warranted. Assuming new cases peak by April/May, global growth could pick up in the third quarter, as the disruption fades and supported by accommodative monetary and fiscal policies.”
Looking Forward
Don’t get us wrong: the waters are choppy, and an economic contraction in the short term is a certainty. But we believe that with hard work, we will get through this storm and sail on to prosperity as we have done countless times before.
Find out more by visiting us at: logisyn.com
