The economy is 'like a coiled spring' and a sharp rebound is possible, analysts predict

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Investors should avoid getting too bearish after Monday's global market rout, according to Patrick Armstrong, chief investment officer of Plurimi Investment Managers.

on Thursday, a 50bps cut from the Bank of England this month and another 50bps cut from the Fed by March 18, along with a further 25bps in the second quarter.

However, monetary policy easing alone in many of the major economies is expected to have a somewhat diminished impact, at least in the short-term, due to the impact of the coronavirus on economic growth, as highlighted by UBS analysts in a note Tuesday. "In our view it is therefore a step change in fiscal spending from major economies that holds the key to reinvigorating growth expectations and improving investor confidence," the note said.Armstrong added that in combination with more dovish monetary policy, fiscal stimulus is on the way. U.S. President Donald Trump on Monday floated a payroll tax cut in the hope of offsetting the negative impact of the virus.

"We've got a virus that has a big impact on the economy, it is going to decimate corporate earnings in some sectors, but what it's doing is temporary," Armstrong told CNBC's "Squawk Box Europe" on Tuesday. "The economy is going to be like a coiled spring, in that we've got interest rates at zero, we're going to have fiscal stimulus, we've got long bonds at zero, we've got oil prices that have fallen by 30% in the last day, so those are all of the ingredients you want to kickstart an economy once we do get past this crisis of confidence."

 

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Monkey can tell me that. They should predict a bottom just to proven wrong

lol...

This statement feels like nonsense. The economy is over leveraged and in a terrible economic situation. It’s primed to fall further. In 2008 the stock market fell ~50%. We are down ~18% now. Room to fall more.....

Number go up.

They needed to pull all their money out of tax/deregulation type stock to flood money into health/medical stock

Should say is the Market is a Big ship and the lower decks are flooding, but nobody in the upper section believes the Titanic will ever sink. Keep playing the music

NYstockexchange has become a Circus. Clueless hysteria

How much of the analysts own money will they bet on this? Or will they bet other people’s money?

Zero skin in the game

😂 $150B in repo operations and nobody knows where it’s going!!

Or sharp meltdown ...

How many of them are long? Yea no further questions

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