Page 2 - Investment Outlook

Coronavirus Crisis
Our way of life and all that we live for has been threatened.
The world has not experienced a global pandemic of the magnitude of the coronavirus since the 1917 outbreak of Spanish Flu. Back then, due to the WWI press restrictions, the precise details of that pandemic are not published, but it is reported that 500 million people were infected and that some 40 million people died. It is no wonder that many scientists and philanthropists have been suggesting for some time that a pandemic is the greatest threat to mankind.
Our way of life and all that we live for has been threatened. The self-imposed lockdown to restrict the spread of the virus has created a sharp and deep recession. In March, as stock markets feared the worst, we saw one of the greatest losses of wealth in any one month. In April, through lockdown, we saw as dramatic a loss of liberty as the world can recall in peacetime.
The economy will have one of its worst quarters of financial inaction since the 1930s. If it were not for the massive financial interventions by governments and central banks, led by the US Federal Reserve to limit the impact of the coronavirus crisis, then the world would now be staring at a 1930’s style depression.
The style and shape of the 2020 recession is constantly reviewed and analysed. There were early hopes of a V-shape recession. While that has been in part the style of the stock market recovery, it is now unlikely that the real economy will bounce back that quickly. The process of lifting the lockdown is far harder than imposing it.
Records show that the US Dow Jones Industrial Average Index fell 33.47% due to the Spanish Flu, 33.87% due to the great financial crisis and 32.81% in March due to the coronavirus. Markets have priced in the fall in economic activity, the lockdown exit difficulties, massive state support and high unemployment. As of the 14th May, the Dow Jones had recovered 25% from the floor on the 23rd of March but it was still 20.9% off its pre-crisis high of 29398 points on 14th February.
ESTATE CAPITAL INVESTMENT OUTLOOK
1 EDITION 33 Summer & Autumn 2020