FAST FIVE: "The Recession Poised To Hit The Global Economy Will Be Unlike Any Other In History"
“The Recession Poised To Hit The Global Economy Will Be Unlike Any Other In History” Authored by Ian Lyngen and Jon Hill of BMO Capital Markets Service PMIs across the globe cratered during the month of March; Japan, Germany, France, and the UK all experienced dramatic declines in business sentiment as the coronavirus pandemic began to unfold.
On the flipside, manufacturing PMIs came in better than anticipated as a theme – although it's worth reiterating the context that all PMIs were sub-50 and decidedly in contractionary territory.
Unlike during armed conflicts, when the industrial machine has stepped up production and overshadowed the retrenchment of consumption, there is no real offset to plummeting economic activity.
Perhaps, but we'll argue this outlook has a much better probability of coming to fruition if the domestic economy is shutdown for 9-10 months versus 9-10 weeks.
Liquidity reserves on the part of central bankers globally, cash reserves for businesses hoping to remain ongoing, and of course households – which could benefit from an additional injection from the Federal government to weather to economic storm.