



ECONOMIST EXPLAINS WHY THE 2020 4th QTR AND 2021 1st QTR ECONOMY MAY BE ROUGH
TPA draws on this week’s presentation by Benjamin Tal, Economist at CIBC, to describe what is in front of us for the 4th quarter of 2020 and the 1st quarter of 2021. In an hour-long presentation, Tal explained that the U.S. has performed much better economically than the rest of the world. This was because of the decisions it made when faced with the trade-off between “lives and livelihood.” Throughout the pandemic, the U.S. has remained more open than most countries and, as a result, has the worst health record. The U.S. also has a lower level of economic devastation as a combination of fewer restrictions and huge economic stimulus.
He further described the recovery as 2 recoveries. A “V-shaped recovery for two-thirds of the economy” and an “L-shaped recovery” for the services sector. This is actually the K-shaped recovery that TPA discussed on 9/8 in “WHAT A K-SHAPED RECOVERY MEANS FOR INVESTORS.”
Tal went on to say that small businesses have been hit the worst and larger companies. Like AMZN, actually benefited from the situation.
Tal concludes that the 4th quarter of 2020 and the 1st quarter of 2021 could be a problem in the U.S. for several reasons:
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Lance Roberts is a Chief Portfolio Strategist/Economist for RIA Advisors. He is also the host of “The Lance Roberts Podcast” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Follow Lance on Facebook, Twitter, Linked-In and YouTube
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