COVID-19 Updates:
Calming perspectives in uncertain markets

Todd Mattina

Senior Vice President, Chief Economist, Team Co-Lead

Mackenzie Multi-Asset Strategies Team

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Flattening the Curves

March 27, 2020

Summary:

  • Stopping the pandemic spread while minimizing the steep economic cost is the key policy challenge
  • Policymakers have acted quickly with strong measures to backstop the economy and credit markets
  • Policy stimulus should strive to prevent a further deterioration in demand and unemployment, but policymakers cannot offset the negative supply-side impact of a prolonged economic lockdown
  • The macro outlook depends on the duration of social distancing to contain the epidemic
  • Long horizon investors should continue periodic portfolio rebalancing and ensure adequate liquidity to avoid selling assets at distressed prices

Todd's latest from social:

March 19, 2020

As governments face the largest budget deficits since the Great Recession, strong fundamentals are important to underpin a “whatever it takes” fiscal policy response. Amongst the G-7 countries, Canada and Germany have the most fiscal space to accommodate larger budget deficits as needed.

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Market turbulence follows coronavirus and oil price war

March 12, 2020

The worsening coronavirus outbreak and oil price war have sharply increased financial market turbulence. The number of coronavirus cases is expected to rise sharply over coming weeks in North America and Europe based on the views of respected epidemiologists. Even if fatalities remain low, essential measures to contain the virus are expected to disrupt global supply chains and weaken consumer confidence. Compounding the economic shock from the coronavirus is Saudi Arabia’s oil price war, whichcomes at an inopportune time for the global economy. Ramping up oil supply to boost market share and displace US shaleproducers has increased credit risk in the high yield energy sector.

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