The Path Ahead: From a Bear Market to the New Normal
Overview
Equity markets have priced in an optimistic scenario of earnings recovering to pre-COVID-19 levels by the end of 2021—a V-shaped recovery. While it is within the realm of possibility, there is considerable risk to this scenario. We consider what conditions could support a V-shaped recovery, and circumstances under which other, more gradual recoveries would likely prevail. We also explore some possibilities about how COVID-19 will change behavior and demand preferences over time.