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Memorial Day marks the unofficial start of summer and a key moment for the US in its journey through the COVID-19 pandemic: All 50 states have begun—to varying degrees—easing COVID-19 related restrictions.
As restrictions on movement ease, we will start to get a handle on the answer to one very important question: What shape will the US economic recovery take?
As markets have bounced off what has proven at least a near-term bottom on March 23, many have commented on narrowing breadth—i.e., market leadership among a decreasing number of stocks. Specifically, many noted the bounce was largely driven by the big tech stocks—particularly those commonly known as the FANG stocks (Facebook, Amazon, Netflix and Google, with some adding Microsoft and Apple and rendering the acronym unpronounceable). It’s worth noting that not all of those names are classified as technology companies from a GICS sector perspective: Facebook, Netflix and Google (Alphabet) all fall in the communication services sector, while Amazon is considered discretionary and Microsoft is the only “true” technology company.
Nevertheless, sector returns—in the US and overseas—tell a slightly different story from a tech(/communication services/discretionary)-led bounce.
Unprecedented times beget unprecedented measures—and with the global financial crisis still visible in our rear-view mirrors, global central banks have in some ways responded to fresh crisis with substantially similar tools. Meaning they’ve lowered rates (to the extent they can, given relatively low rates to start with) and they’ve offered various lending facilities to ensure markets maintain sufficient liquidity levels.
Another day, another grim US economic milestone amid the COVID-19 pandemic. On May 8, the US Labor Department released its April Employment Situation report. The magnitude of the numbers was momentous—nonfarm payroll employment fell by 20.5 million people and the unemployment rate jumped to 14.7%, from 4.4% in March.
Featured Author: Gurpreet Pal
Gurpreet Pal is an analyst on the Artisan Partners Sustainable Emerging Markets Team.
As the COVID-19 pandemic evolves, emerging markets are set to take center stage. The US, Italy and other developed markets appear to be flattening the curve and starting to reopen their economies. In comparison, many emerging markets appear to be in much earlier phases of an outbreak. Within EM, India is an especially intriguing country to watch as it seems to be managing the pandemic better than previously feared.
India has the seemingly right conditions for a high number of cases and rapid transmission: