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  3. Market Watch: Covid-19 Economic Insights

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Market Watch

Periods of extreme turbulence call for calm, clear thinking.
Let our experts guide you.

 

 

Market Insights

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How do we monitor the spread of the Covid-19 virus and the impact on markets?

Read the latest on the economic and investment implications of the Covid-19 outbreak in this regularly updated bulletin from Karen Ward, Chief Market Strategist for EMEA, and Ambrose Crofton, Global Market Strategist.

Read more
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Where still offers value and could continue to benefit if a vaccine is approved?

A Covid-19 vaccine could be a game changer for the global economy and markets. Global Market Strategist, Mike Bell highlights three areas that could continue to benefit should a vaccine be approved.

Find out more
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Monthly Market Review

Vincent Juvyns, Global Market Strategist, reviews the economic headlines from the last month and considers the outlook for markets against a challenging economic backdrop, with Covid-19 infections continuing to rise globally.

Find out more

 

Long-term impact of Covid-19

It is too early to predict the nature of a post-pandemic world. However, we can begin to consider the impact of Covid-19 beyond the very short term. Where has the crisis accelerated trends that were already underway, and where have historical trends been pushed in a new direction? We assess the impact across three key areas.

Consumers Corporates Governments and social dynamics
Consumers

Online alternatives

Covid-19 has forced people to buy a broader range of products/services online. Some of this shift may be permanent, with ripple effects across sectors (for example, higher e-commerce penetration increasing demand for industrial property).

Work-related travel

More flexible working arrangements will likely result in higher demand for high-speed broadband and may also impact housing choices. Increased use of video meetings could lead to sustainably lower levels of business travel.

Rainy-day savings 

Savings rates spiked over the summer as governments protected incomes while spending options were limited. Increased consumer caution could lead to higher savings rates ahead, although this may only be transitory. 

Corporates

Strong get stronger 

This economic downturn has accelerated industry consolidation. Companies with strong balance sheets have been much more resilient, and we expect this trend to lead to a wider gap between winners and losers across sectors.

Digital transformation 

Corporate budgets are likely to allocate more resources towards technology, both to enhance business resiliency and to lower the cost of service. Cloud-based platforms may be well placed to grow market share. 

Automation adoption

Companies have long been developing machines to replace human labour, and the pandemic provides a further push. We see wide-ranging impacts across corporate margins, capex intentions and hiring among others. 

Governments and social dynamics

Tax policy

There is little appetite for a return to widespread austerity, but with government debt ballooning we expect future tax policy changes to put more pressure on the corporate sector than the individual.

Critical industry independence

Covid-19 has identified fault lines in the global supply chain. Governments are likely to be more focused in future on ensuring that key industries (for example, healthcare) can operate without relying on overseas imports.

Heightened company scrutiny 

Given huge government support, corporate behaviour is increasingly coming under the spotlight. This scrutiny includes how companies have treated workforces, the use of government funds during the pandemic and plans for future spending. 

SECTOR EFFECTS OF COVID-19

Sector specialists for some of the sectors most affected by the pandemic explore the medium- to long-term implications.

Technology

The disruption resulting from Covid-19 has emphasised technology’s vital role in keeping the world connected, as well as accelerating some longer-term shifts.

Learn more

Energy

The global shutdown led to a significant decline in energy demand. Continued uncertainty poses questions over the sustainability of the capital structure for some high yield energy companies.

Find out more

Healthcare

For a sector at the forefront of the pandemic, the crisis presents both investment opportunities and the potential for long-term behavioural shifts.

Read the full view

European banking

European banks began the crisis in a period of relative strength and still look adequately prepared for extended uncertainty. Relative valuations appear to present some interesting opportunities.

Discover more

Market Watch webconference Series

Join our Market Strategists across Europe, as they discuss the market reaction to the Covid-19 outbreak with senior investment professionals from across our equity, fixed income, global macro and multi-asset teams.

WATCH NOW

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from J.P. Morgan Asset Management or any of its subsidiaries to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own professional advisers, if any investment mentioned herein is believed to be suitable to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not a reliable indicator of current and future results.
 

J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/emea-privacy-policy.
 

This communication is issued in the UK by JPMorgan Asset Management (UK) Limited, which is authorised and regulated by the Financial Conduct Authority. Registered in England No. 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP

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