Coronavirus crisis

Luca Paolini (Pictet Asset Management): “There Is a Permanent Loss of Economic Activity that Is Not Fully Priced in the Markets”

Date:

Luca Paolini Pictet AM

Author: Meritxell Sedo

  1. Considering that developed economies are still far from recovering their previous level of daily activity, why have the markets been so optimistic?
  2. The main reason is the global fiscal stimulus, which now represents a 4.2% share of potential global GDP, well above the 2.4% reached in 2008 and 2009
  3. Before the crisis, the EPS (Earnings-Per-Share) expectations on the MSCI All Country Index for this year were around 10%. As for now, the growth consensus for the global EPS is around -17.4%