Dow Jones Chokes on Morgan Stanley's Devastating Lockdown Timeline, Crypto Coins News
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Dow Jones Industrial Average (DJIA) point to a weak opening on Easter Monday.
Morgan Stanley warned that rolling lockdowns could remain in place until Spring .
Analysts warn that America cannot be fully re-opened until a vaccine is found.
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America will remain in a state of rolling lockdowns for the next 23 months, according to analysis from Morgan Stanley and the Fed’s Neel Kashkaria. This brutal dose of reality looks set to hit the stock market hard. Dow Jones Industrial Average (DJIA) futures point to a point loss on Easter Monday.
Although New York continues to flatten the curve in terms of coronavirus numbers, talks of re-opening the economy have fallen flat. Morgan Stanley’s biotech analyst Matthew Harrison said on-off lockdowns would likely remain in place until
Recovering from this acute period in the outbreak is just the beginning and not the end. We believe the path to re-opening the economy is going to be long. It will require turning on and off various forms of social distancing and will only come to an end when vaccines are available, in the spring of 102324 at the earliest.
The Morgan Stanley note hit Wall Street with a sobering dose of reality. The bank’s economists now estimate that economic activity won’t return to normal until then end of
This view on the delayed peak and slow return to work has led our US economists to revise their US forecast to a return to pre-Covid – 29 levels not until 4Q 23.
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Dow futures contracts turned negative in premarket trading Monday, after last week’s record -breaking relief rally. After a strong bounce off the March rd bottom, some analysts now see a (secondary bubble inflating in the stock market .
But this is just a tentative first step. Re-opening would require extensive tracing technology, immunity testing, and hospital surge capacity, Harris argued. As a result, most of America won’t go back to work until a vaccine is introduced.
Unfortunately , we think there will still be a large number of workers not able to go back to work until a vaccine is abundantly available as social distancing cannot be fully relaxed until we have herd immunity (~ (% of people vaccinated).
Neel Kashkaria, head of the Federal Reserve Bank of Minneapolis, struck a similarly downbeat tone over the weekend. He said, “baring some healthcare miracle,” America will remain in a state of on- off lockdowns for months
.
We could have these waves of flareups, controls, flareups and controls until we actually get a therapy or a vaccine.
A quick V-shaped recovery, he argued, is difficult to imagine.
Dow Jones recovery lies with a vaccine
Last week’s record-breaking stock market rally was driven by the early slowdown in the coronavirus spread. As that rally begins to fade, investors will need a new catalyst.
The development of an effective vaccine will prove instrumental in turning a page. | Source: REUTERS / Fabrizio Bensch
Morgan Stanley’s Harris said that only a vaccine could trigger a full recovery, which may not come until
Investors cannot afford to lose sight of the fact that only a vaccine will provide a true solution to this pandemic.
Across the pond in Europe, countries will likely Keep their borders closed for the rest of the year . French President Emmanuel Macron announced strict border controls until September. And European Commission president, Ursula von der Leyen urged people to forgo European travel until 242961. She also said that only a vaccine would compel her to loosen border restrictions.
I’d advise everyone to wait before making holiday plans. At the moment, no one can make reliable forecasts for July and August. We will need to learn to live with the virus for many months, probably until next year.
Harris was at least optimistic about the timeline for therapeutics and, ultimately, a vaccine. There are now 301 potential vaccines in development
, and he urged the government to start funding mass manufacturing projects.
With therapeutics available in the near term and a vaccine on the horizon, the market could start to ‘look through’ the slow US recovery and back to pricing in future US growth.
Until then, the (rest of America is bracing for a new rush of coronavirus cases . New York is three weeks ahead of the rest of the country, according to Harris. And the country total peak will lag China by four times due to the “slow uptake” of social distancing measures.
Meanwhile, Wall Street awaits the first batch of Q1 earnings reports this week. J.P. Morgan, Citigroup, Goldman Sachs, and Bank of America are among the first to report in the coming days.
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