On April 3, Hady Farag, partner & associate director at Boston Consulting Group, talked to CNBC TV about a new survey gauging investor sentiment amid the coronavirus pandemic spread in the US.
Based on the Group’s research, investors are still concerned about what the whole of 2020 might bring in the wake of the crisis. However, 55% of the investors who participated in the survey see the negative financial impact ending by the end of Q3 2020.
But, very few of the participants expect a ‘V’-shaped recovery from the current economic downturn. 15% say that the S&P 500 will return to earnings growth by the end of the third quarter of the year.
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85% are bearish or neutral when asked about the general market outlook for the rest of this year. They are convinced that the economy will experience a U-shaped recovery, like what was seen after the 2008 crisis.
Hence, the economy will not bounce back rapidly to the levels that it had achieved before the crisis.
Investor Preference
In the current situation, there are two significant things to focus on. First, there is a need to protect liquidity and financial health. Second, companies should focus on making strategic investments to make huge gains in the market rebound.
Through wise investing, companies can reap in large profit margins when the global economy starts its recovery. Up to 60% of the interviewed investors are bullish in the market outlook for 2021 and 2022.
As much as most of the companies are entangled in attempts to combat the pandemic and not making any profits, investors are firm. They prefer the companies that will position themselves to have the edge over their competition when the virus is contained.
Featured image via CNBC YouTube
