by Ralph Cole, CFA
Director, Equity Strategy and Portfolio Management
Economic signals indicate that the recovery has begun around the world. As expected, China has been the first to emerge from recession, and their economy is moving forward. As you can see from the Purchase Managers’ Index (PMI) chart below, China’s manufacturing sector emerged back in March, while the U.S. manufacturing economy exited recession in June. Europe has not been as robust, but it appears that they too are headed in the right direction.
We realize this recovery will not be a straight line - it never is. There will be fits and starts, as each region deals with either the continuing outbreak of COVID-19, or the longer lasting effects from the virus. We continue to believe the right way to look at this recovery is through the lens of the “checkmark” or “Nike swoosh” graphic seen below.
The globe has to recover from the economic hole it has dug. As you can see from the chart above, we are not predicting the U.S. economy will be back to 2019 levels until the end of 2021. While the new expansion has begun, the actual slope of the curve may be steeper or shallower depending on the rate that the U.S. economy opens.
Our Takeaways from the Week
The next global expansion has begun around the world. Each region will open up at their own rate, but the process has slowly begun
We want to wish everyone a happy and healthy Fourth of July weekend