By , David Bailin, Chief Investment Officer, and Steven Wieting, Chief Investment Strategist and Chief Economist
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We explore global investors’ expectations in light of the difficulties likely in reigniting the economy. The outlook may be more volatile than many are anticipating.
This week a detailed, two-part Strategy Bulletin… The shortest/deepest recession, the most volatile month for the S&P 500 on record, and a one-month bear to bull market swing. Consumers are afraid, and governments are looking at how to reopen their economies to stave off further damage.
Part One explains what is priced into markets versus the practicalities and complexities of “turning the economy back on”.
With substantial support from the Fed and Treasury, analysts and markets are looking far ahead and perhaps over the worst of the earnings declines. Citi Private Bank forecasts a -40% GDP decline in 2Q with earnings down 65% year-to-year before the rebound begins.
Part Two presents Citi Private Bank’s economic assumptions and looks at the market implications. We provide GDP estimates for the global economy, estimated S&P earnings and what this means for portfolios.
As we look at expectations of global investors and the realities of turning the world economy back on, country by country, our detailed observations suggest a more volatile road ahead. The likelihood that the downturn will be short and predicable appears modest given the circumstances.
Read CIO Strategy Bulletin.
All forecasts are expressions of opinion and are subject to change without notice and are not intended to be guarantees of future events.
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