COVID-19 market scenarios

The interplay of health, monetary and fiscal policies—evaluating risks and opportunities

23 Mar 2020

Key takeaways

  • World leaders have made unprecedented decisions about the costs and benefits of temporarily restricting economic activity to limit the spread of COVID-19.
  • In response, major central banks have turned to their global financial crisis playbook—in a matter of days.
  • Fiscal policymakers have announced large-scale support that includes loan guarantees, deficit spending measures and direct support.  

Fiscal policymakers are ramping up their response to the COVID-19 outbreak. So far, they’ve announced assistance packages worth 10% of GDP for the US, 16% of GDP for the UK, 15% of GDP for Germany and 15% of GDP for France—as a start.

Our research strategists believe these measures—and policymakers’ willingness to do more—will help us avoid a global financial crisis-style credit crunch. But, so far, widespread restrictions on personal movement are impacting the markets more than fiscal policy announcements.

How quickly can economic activity get back to normal? How much can policy response limit corporate bankruptcies and job losses? Our research partners have thought through a few scenarios: best case, worst case and most probable.

Read the latest UBS House View to see the three scenarios. And, in our live conversation this month, our research partners will highlight stocks they view as relatively resil­ient to disruption from the virus.

Join that call for the UBS House View conversation on Thursday, April 2, at 1 p.m. ET.*  

(This month will be a dial-in call only. There will be no video.) 

Dial in to the live conversation

US toll-free: +1-877-200 4456
International: +1-785-424 1743
Code: 46502#

Listen to the replay (available shortly after the live call)

US toll-free: +1-866-415 9424
International (toll): +1-205-476 0997
Replay code: 46502#

Join CIO’s live UBS House View conversation on the first Thursday of every month at 1 p.m. ET (10 a.m. PT). 

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