Extended Period

Key Points

• U.S. weekly jobless a third straight month of massive job losses in May

Investors face mounting evidence that the economy’s coronavirus-fueled woes may be far longer-lasting than many had anticipated.

But recent comments from top officials have undercut the case for a speedy economic recovery even as states ease lockdown restrictions

“A single catalyst may not spark a pullback, but concerns exist that we believe … investors are dismissing.” Analysts at Goldman Sachs

the risk-reward here in today’s market was “maybe as bad as I’ve seen it in my career.” Famed hedge fund manager Stanley Druckenmiller

Federal Reserve Chair Jerome Powell warned of an “extended period” of weak growth and stagnant incomes.

“There is probably more downside in equity prices than there is in bond yields,” Samana said. “The bond market is already fairly cautious in its positioning in terms of the view of the world that it has.”1

“We are on the back end of the first wave of layoffs, but now we are transitioning from the natural-disaster phase to the recession phase,” said Josh Wright 2

Some businesses have accessed loans from an almost $3 trillion fiscal package, which could be partially forgiven if they used the credit for employee salaries. But many small enterprises are expected to close permanently, leaving some of the 21.4 million people who lost their jobs in March and April out of work.

“We would expect a peak should arrive sometime in late May or June, with continuing claims falling as rehiring resumes,” said Andrew Hollenhorst