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Wednesday, 13 May 2020 12:29

JP Morgan Warns the Market Could Tumble

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(New York)

The market has fallen a couple of sessions in a row and is looking weak today. It is sort of feeling like the decline many have been forecasting is finally grabbing hold as the reality of a long recession grips the psyche of investors. JP Morgan published an interesting report this week, saying that markets could fall significantly but that there are two divergent scenarios that could take place. In the bull case scenario, the re-opening of the economy works, with social distancing measures keeping a second wave from occurring (especially as summer arrives and holds COVID at bay). They describe the bearish scenario like this, saying “The other option is that overly complacent consumers bring down the guard too quickly, a second wave of infections hits, and the world is forced to rethink the optimistic timing of the new normal”.


FINSUM: The big question in our minds is whether a middle ground exists between these two scenarios. Maybe there are some isolated second waves with certain cities getting locked down. The market might just drift from here until the situation becomes more clear.

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