Welcome to Lockdown 2.0

November 13, 2020

As the market and world-at-large were elated by Pfizer’s announcement of positive trial results for its COVID-19 vaccine this week, we all brace for a winter run of global lockdowns and extensive virus spread mitigation measures. In the last three weeks, a number of European countries have reimposed nationwide limitations. Notably, starting October 30^th, France reinstituted its spring lockdown rules which restrict residents to their homes except for trips to buy essential goods, medical appointments, and one hour of physical activity. Germany’s “lockdown light” began on November 2^nd, closing all bars, restaurants, and theaters and limiting access to retail shops, though schools remain open. And within the U.S., we have seen several states roll out pandemic constraints as well, including Illinois, Maryland, and Washington.

This chart provides a quick snapshot of COVID-19 case tallies as of November 12^th. Soberingly, these figures are rising at a pace much faster than the initial wave. We have seen how the spring cases and restrictions hampered productivity and brought a few nations into recessionary territory. In October, the IMF released revised global GDP growth estimates that were mildly positive, reducing the estimate from -4.9% to -4.4% on the back of eased summer restrictions and an influx of fiscal stimulus. While it is expected that fiscal stimulus measures will continue and could dampen the economic blow, global growth will remain depressed for 2020 and into 2021 as we work through this second wave.

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