Lockdowns Lead to Slowdown

April 27, 2022 | David Hernandez, CFA, Director of Traditional Manager Search

Combined column and line chart showing China PMI and COVID-19 cases. Chart subtitle: China PMI fell to a 2-year low amid renewed COVID lockdowns. Chart visual description: Chart has two y axes; left displays China PMI, ranging from 25 to 60 and corresponds with light green columns and a dotted line representing 50 as neutral PMI. Right displays 7-day Average New Covid-19 Cases for China, ranging from 0 to 35,000, and corresponding with blue line. X-axis shows monthly increments from 1/29/20 to 3/31/22. Columns align with each month label, but new cases line goes a little further, as of 4/21/22. Chart data description: Most columns are in the range of 51 to 56, but February 2020, August 2021, and March 2022 were all below neutral, at 28.9, 48.9, and 48.8 respectively. 7-day average new cases blipped up to 4,500 in early 2020 as China came to terms with implementing "Zero Covid" policies, then remained flat or very near flat until early 2022. Particularly March into April numbers have grown exponentially, with 4/21 hitting 30,000+. Chart sources: ourworldindata.org, Bloomberg. End chart description.

COVID cases have been on the rise in China over the last ten weeks, surpassing February 2020 highs by 800%. The seven-day rolling average has moved from 110 new cases at the end of January 2022 to a high of 30,500 on April 21st. Since the beginning of the pandemic, China has operated with a zero-COVID policy, combining testing and tracing with the use of lockdowns to prevent the spread of the virus. These measures have resulted in an extremely low case count compared to the rest of the world. The country’s recent high near 30,000 is still well below the U.S. seven-day average peak of 800,000 in January 2022.

China’s aggressive use of lockdowns to control the spread of the virus has impacted the country’s economic activity. March’s Purchasing Managers Index (PMI) reading was 48.8, below the neutral 50 mark, indicating a contraction in economic activity. Several Chinese cities are feeling the pressures of the recent lockdown, including Shanghai, a key finance and manufacturing hub. Many investors expect Chinese authorities to step in with supportive policies to help the country navigate the current downturn. Ultimately, however, China may need to choose between two of its seemingly opposing agenda items — its zero-COVID policy and its 5.5% target growth rate — with the choice likely to have material implications for equity markets for the rest of 2022.

Print PDF > Lockdowns Lead to Slowdown

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

David Hernandez, CFA
Director of Traditional Manager Search

Get to Know David

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Related Content

05.26.2026

The Best and Worst of Times

The classic novel A Tale of Two Cities by Charles Dickens begins with the line “It was the best of…

Four-line chart showing weight in Bloomberg Aggregate U.S. Bond Index for Treasuries, Government-Related, Corporate, and Securitized sub-indices, 12/31/1999 through 3/31/2026. For date range shown, Treasuries started at 31.7% and end at 45.9%. Government-Related start at 11.4% and end at 4.3%. Corporates start at 20.9% and end at 23.9%. Securitized start at 36.0% and end at 25.9%. For full dataset, please contact marquettemarketing@marquetteassociates.com.

05.18.2026

The “Magnificent One”

Over the last few years, equity markets have been defined by a group of stocks often referred to as the…

Combination column and line chart showing increase in non-renewables and renewables in net installed capacity (GW) in columns and share of new electricity generating capacity by renewables (line) annually since 2005. Renewables ave seen a marked increase in recent years (183.95GW in 2019 to 691.94GW in 2025). Renewable Share was at 86% for 2025. For full dataset, please contact marquettemarketing@marquetteassociates.com.

05.11.2026

A Renewed Focus on Renewables

In addition to the humanitarian toll of the conflict in Iran, the world is currently confronting the impact that trade…

Stacked column chart showing Weight in S&P 500 Index in 1985, 1995, 2005, 2015, and 2025 for top 10 companies at that time, with companies stacked for each year by weight. From 1985-2015, top 10 weight ranged from 17.6% to 21.1%, but 2025's weight was 40.6%. Company makeup changes over time, with no companies from 1985/1995 categories in 2025. For full dataset, please contact marquettemarketing@marquetteassociates.com.

05.04.2026

This Too Shall Reconstitute

Rooted in medieval Persian Sufi thought, the adage “this too shall pass” speaks to the fleeting and impermanent nature of…

Three-line chart comparing cumulative returns for MSCI EM Latin America Index, MSCI EAFE Index, and S&P 500 Index, Jan 1, 2026 through April 24, 2026. Dashed line at February 28 demarcates U.S. strikes on Iran. While all three indices dipped after war began, Latin America Index was higher to begin with and remains high. Most recent data point (4/24) for Latin America is 20.36%, EAFE is 5.7%, and S&P 500 is 5.06%. For full dataset, please email marquettemarketing@marquetteassociates.com.

04.27.2026

Let’s Hear It for Latin America

Latin American equity markets have shown remarkable strength in 2026. After a strong start to the year, the MSCI Emerging…

04.23.2026

We’ve Seen This Before

Diversify. Rebalance. Stay invested. Every one of these letters has concluded with that same advice in some shape or form….

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >