Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today
Already have an account? log in
Morgan Stanley’s Sobering COVID-19 Call: ‘This Is Far From Over’
The US coronavirus outbreak will "have a very long tail", Morgan Stanley's biotech analyst Matthew Harrison writes, in a note dated Sunday, striking a cautious tone on the timeline for reopening the world's largest economy.
Optimism around a "reopening" has blossomed recently thanks in part to an apparent flattening of key "curves" in New York (e.g., hospitalizations) even as the death toll (the most macabre of all lagging indicators) continues to mount.
Trump administration officials, meanwhi
FWIW, I think Morgan’s timeline is reasonable but their conclusions relative to earnings and GDP are not. Return to work this summer will happen, and I expect any bias exerted in most jurisdictions will be pro-work rather than pro-safety. A second wave this fall will be a media snoozer after the first few headlines – with a smaller peak, hospital surge capacity in place, a few treatment options, and comforting news flow about vaccinations by then. “Snoozer” matters, as it helps regulate consumer and business response. I expect the second wave is simply managed to best effort by the medical community and mostly overlooked by everyone else. Re-lockdowns will be reluctantly imposed and widely pushed back to the limits of local hospital capacity.
Basically, Morgan’s timeline – but by August, the “economy vs safety” debate gets consistently called the other direction. Businesses will be busy in a land-grab for the post-Covid economy and sorting out who the survivors are and who replaces them. That one will be a sprint race, not a marathon, and it won’t pause for anything.
I don’t know Uptown. I mean jurisdictions exerting a bias against their own self interest. You can only cover your tracks so well. Risky business to get into.
We’ll see.
-TB