S&P 500 U Shape Recovery 2020-2022

SP:SPX   S&P 500 Index
The impossible "V-shaped"

The year 2020, a bad memory quickly forgotten? No, warn more and more economists, alarmed by the violence of the shock in the first half. They expect a slow recovery, provided that a second wave of the new coronavirus does not strike.

The IMF has also made it clear that, despite the expected rebound, world GDP in 2021 would come out cut by 6.5% compared to what was expected before the pandemic.

Some sectors are affected for a long time, especially in services. Perfect example: tourism and travel. No catching up possible for empty rooms, meals never served, planes nailed to the ground. Did IATA , the international air transport association, not warn that it did not expect to return to normal before ... 2023?

In industry, factories face many health restrictions. Farmers all over the world are struggling due to the lack of foreign workers.

Exit therefore, the "V" scenario that some people were still hoping for in February. Rather, it is a "U-shaped" scenario that emerges at best, with several months of recession before the economy recovers. See a "W" with alternating rebounds and relapses. Or, worse yet, an "L" with depressed activity for a very long time.


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