As we started 2020 the US economy was performing very well. At that time, I felt it would take an exogenous event, also known as a “Black Swan event” to cause a US recession this year.
A pandemic named the Corona Virus (COVID-19) fits as an exogenous event. Once the Corona Virus started to spread it became obvious that many of the global economies would have to be basically shutdown to combat the disease.
The question now is not if there will be a US recession but how severe will the recession be. Will it be a first and second quarter 2020 phenomenon, with a sharp turnaround for the remainder of the year? A majority of investors are hoping this is the outcome which occurs, but the truth is no one really knows.
This sounds scary because it is, but we can make reasonable assumptions which allow us to have an educated guess as to what the outcome will be. So far, the consensus is that the first and second quarter of 2020 will be the worst numbers ever recorded for the GDP (Gross Domestic Product) and the unemployment rate in the US. The media will most likely make big headlines of how bad these numbers are but the worst maybe in by the time this occurs.
Please remember this is a health crisis first and foremost and globally some experts believe a recovery could be fairly fast and strong. No one knows for how long we might be in the current state, but I remain confident where we will be in the future. I am monitoring the markets and your investments with great diligence to keep us well positioned for positive days ahead. Strong recoveries have followed all previous market down turns, and I am extremely confident that this time will be no different.
I am here to help you understand what is happening with this current crisis. Please feel free to contact me with any questions or comments you may have.
Best Regards
Bill Achtymichuk