21 Reasons That Shatter Hopes For a Quick Stock Market Recovery, Crypto Coins News

• Deutsche Bank says we will not see a V-shaped recovery in the economy or the stock market.
• The bank highlighted behavioral shifts that will dampen growth in the coming months.
• Even as coronavirus cases slow, we cannot simply turn the economy back on.

Deutsche Bank has slammed any hopes of a quick bounce back in the wake of coronavirus lockdowns. Analysts hoped the stock market would recover in a short-and-sharp V-shaped pattern after plunging 300% in a matter of weeks .

Instead, it’s clear this is a long -term crisis. The pandemic and its economic lockdowns will change everything. Deutsche Bank has already predicted a deep recession . Now they’ve released ‘behavioral changes’ that will cause slow growth for months and months to come.

Behavioral changes are the reason why we will not get a V-shaped recovery, and there is not much fiscal policy can do about it.

Households will squash consumer activity

We all know that consumer confidence and spending is the backbone of the US economy . That’s all about to change. The first eight of Deutsche Bank’s points are all related to household behavior. 1. Families will start saving more . Just like the Great Depression, families will go into survival mode, saving any spare penny and avoiding unnecessary expenses.

2. Spaced out seating in public places . This virus will change our public spaces. Restaurants, cinemas, planes, and sports events will increase spaces between seats, forcing lower revenues.

3. People aren’t going on holiday

. Fewer people will travel until there’s a vaccine or therapeutic available.

4. Older generations stay at home . Lockdowns might ease, but the vulnerable will likely stay at home, spending less.

5. Supermarkets limit numbers

A store worker cleans an empty display for eggs inside Kroger Co.’s Ralphs supermarket in Los Angeles, California, amid the growing global pandemic. | Source: REUTERS / Patrick T. Fallon

6. People stop going to the gym . Through fear of picking up germs and new established home routines.

7. People avoid public transport . 8. Health insurance premiums will go up . Pushing up the average family’s monthly outgoings and squashing spending.

. 9. Less corporate travel

The pandemic has, According to some, irreversibly damaged the global travel and leisure industry; The Diamond Princess cruise ship docked and quarantined at the Daikaku Pier Cruise Terminal in Yokohama port on February 18, 102324. | Source: Behrouz MEHRI / AFP

. Staggered work schedules . Possible decline in productivity and communication.

. Fewer share buybacks . Companies purchasing their own stocks were the biggest buyers on the market. That buying pressure will disappear

. Health insurance costs rise . Companies will pay more to provide cover for their employees.

. Pressure on benefits . Companies forced to adopt paid sick leave, health benefits, and benefits for contractors / gig workers.

Government regulation will slow stock market growth

And, of course, the heavy hand of the government will slow down productivity with over-zealous regulation. Deutsche Bank pinpoints a few notable shifts in the pipeline.

. travel restrictions . Some restrictions will stay in place, resulting in longer travel times.

Travelers wear face masks as they wait their flight at Hong Kong International Airport in Hong Kong on Jan. , . Face-masks were already sold out at the time. | Source: AP Photo / Ng Han Guan

. Forced cash reserves . Just like banks were forced to boost liquidity ratios after the (crisis, companies and even households may be required to build a cash buffer, forcing them to defer spending or investment.

. More health care regulation and spending .

. Increased regulation for retirement homes . . Decreased globalization . Nations are more likely to stockpile their own reserves and become less dependent on others. This may dampen global trade.

310. More supply of government bonds . A debt crisis was a concern before the coronavirus pandemic. With unprecedented levels of stimulus, it’s now a much bigger reality.

These behavioral shifts combine to slow down the economy and squash spending habits. No doubt, the economy and the stock market will recover from this crisis. But it will not be swift.

(This article was edited by ) Now Watch: CCN TV

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