The\nNike-Swoosh-Shaped Economic Recovery? <\/strong>Market-watchers and economists have\nbeen eyeing China\u2019s economic recovery. Since China was the first country to run\nthrough the cycle of the pandemic (shutdowns, restriction on movement, gradual\nreopening), economic data from China can be useful for projecting how a gradual\nrecovery may look in the U.S. and elsewhere. The takeaways are mixed, but not\ndire: Chinese factory profits fell by -36.7% in Q1 and the economy suffered its\nworst quarterly decline in decades, but the sharp drop-off was followed by a\nsharp bounce-back to pre-virus factory activity.1<\/sup> The main issue was\nthat China\u2019s economy returned to a world where demand had collapsed, such that even\na resurgence in economic activity did not result in a snapback of sales,\ndeliveries, and trade. Because the entire world is riding the same wave and\ndemand is only likely to creep higher over the next several months, we might\nreasonably expect that the economic recovery looks more like a Nike \u201cSwoosh\u201d\nthan a \u201cV.\u201d The good\nnews, in our view, is that we have likely already reached the lowest point of\neconomic activity for the crisis, so the gradual climb upwards is arguably\nunderway. The question is, what will the rate of recovery be?<\/p>\n\n\n\n _____________________________________________________________________<\/p>\n\n\n\n How to Use Market Volatility to Your Advantage<\/a><\/strong> Download Our Guide, \u201cUsing Market Volatility to Your Advantage\u201d<\/a>2<\/a><\/sup><\/strong><\/p>\n\n\n\n _______________________________________________________________________<\/p>\n\n\n\n A Harsh Reality for\nU.S. Manufacturers \u2013 <\/strong>Stories are starting to emerge around the country of factories\nshifting from furloughs to outright closures. It\u2019s difficult news to digest,\nparticularly for those whose jobs are being eliminated and may not return. The\nfactory closures are adding up from a dishware maker in North Carolina to a\ncutting board maker in Michigan, a Polaris jet ski manufacturer in Indiana, and\na factory that produces furniture foam in Oregon. The harsh reality for many of\nthese manufacturers, however, is that the Covid-19 pandemic may simply be\naccelerating an event that would have occurred anyway in a matter of time.\nSince the late 1960s, the United States has been losing manufacturing jobs in a\nsteady decline. The globalization of supply chains has been a major factor, but\nthe US economy has also been evolving from an industrial economy into a\nservices, consumption, and technology\/information-based economy over the same\nperiod. 3<\/sup> Many companies are using the tragic moment to speed up\nstrategic shifts that may have been inevitable.<\/p>\n\n\n\n U.S. Manufacturing\nEmployment Has Been in Steady Decline<\/strong><\/p>\n\n\n\n Expectations are\nFalling, and That May Be a Good Thing<\/strong> \u2013 US consumers and small businesses\nare lowering their expectations for a strong economic rebound. In April,\nAmericans\u2019 views on the job market and personal finances declined dramatically.\nMore Americans than ever were worried about losing their job, while a record\nnumber also had low expectations for future earnings, income, and spending.\nSimilarly, the small business optimism index recorded its biggest two-month\ndecline in the index\u2019s history, with a majority of small businesses around the\ncountry not expecting a rebound for at least six months.5<\/sup> All this pessimism may be a good thing. <\/em>When\nit comes to equity markets, one of the major drivers of future returns is\nwhether the actual economic outcome exceeds expectations. As expectations fall,\nthe bar is lower for the economy to surprise to the upside, which can help push\nstocks higher. In this sense, investors should root for dire sentiment, as it\nbuilds the \u201cwall of worry\u201d stocks historically love to climb.<\/p>\n\n\n\n It may be hard to find the silver linings in the current\ncrisis, but that doesn\u2019t mean they aren\u2019t there. To help give you additional\ninsight into how you can make the most of turbulent times, I recommend reading\nour guide \u201cUsing Market Volatility to Your Advantage.\u201d6<\/sup> This guide\ncan help you learn about our insights, based on decades of experience, about\nhow a volatile market may be able to actually help investors refine their\nstrategies and potentially generate solid returns over time.<\/p>\n\n\n\n You\u2019ll get our ideas on:<\/p>\n\n\n\n If you have $500,000 or more to invest, download this free\nguide today by clicking on the link below.<\/p>\n","protected":false},"excerpt":{"rendered":" China may be a model for U.S. recovery, the upside of lowered expectations, manufacturing\u2019s long slow decline<\/p>\n","protected":false},"author":3,"featured_media":7426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-8654","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8654","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=8654"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8654\/revisions"}],"predecessor-version":[{"id":10602,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8654\/revisions\/10602"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=8654"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=8654"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=8654"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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Current market volatility is challenging for just about every investor, especially with all the unknowns that come with the current pandemic. But for all the worry and discomfort volatility often causes, did you know there are also several positive aspects of volatility?
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If you have $500,000 or more to invest, get our free guide, \u201cUsing Market Volatility to Your Advantage\u201d and learn our insights, based on decades of experience, about how a volatile market may be able to actually help investors refine their strategies and potentially generate solid returns over time.
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You\u2019ll get our ideas on:<\/p>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/3_image-1-of-1-1024x395.png\")
Source: Federal Reserve Bank of St. Louis4<\/sup><\/em><\/strong> <\/figcaption><\/figure>\n\n\n\n