The real new normal comes now.
At last it seems that the worst of the COVID-19 pandemic has passed and we are moving towards what is a new normal. And I’m not talking about this new normality, referring to whether to wear a mask or social distancing, but rather to the fact that economic activity has suffered a great slowdown and we don’t know where we are now.
The truth is that the countries speak of billions that will give aid to the people, but today no country in Europe or America has recovered its economic activity freely. There are restrictions especially in the opening of businesses related to leisure and tourism.
And the stock markets live in the current moment with an excess of optimism, since they assume that with the new normal business and companies are the same as before. The stock market has anticipated the true recovery, because now with the reopening of daily life there are business failures, unemployment will begin to increase, bank delinquencies will begin to increase and the companies that remain will see their income decrease.
Now the real pain of the economy will begin, and the difficulties of the people. There is talk of GDP drops of 15 or 20%, this is a lot and a recovery of at least a couple of years.
The stock markets will soon reflect (this is my opinion) this new normal. At the moment there is a bit of a bubble in the euphoria of the reopening, but the fall of some great company will be the trigger for this fall. Attentive to Boeing or Airbus, companies that have been very complicated to be practically paralyzed at the moment.