Trader Gregory Rowe, center, and others work on the floor of the New York Stock Exchange Monday, March 16, 2020. (AP Photo/Craig Ruttle)
SALT LAKE CITY — U.S. markets are making gains during the global pandemic but is a recession ahead?
JPMorgan Chase CEO Jamie Dimon expects a “bad recession,” saying that in the most adverse scenario, gross domestic product (GDP) could plunge at a 35% annual rate in the second quarter and that a downturn would last through the rest of the year.
Shane Stewart, Managing Sr. Financial Planner at Deseret Mutual, spoke to Lee Lonsberry about his predictions for the economy as the world copes with the COVID-19 pandemic.
Stewart defined a recession as at least two consecutive quarters of no growth or negative growth of the GDP.
He said before the coronavirus pandemic struck, the U.S. economy was fundamentally strong whereas the recession beginning in 2008 was deeply felt because it exposed a housing flaw in the economy.
“So [the economy today] has the potential to bounce back a little quicker. But we don’t know that yet,” Stewart said.
“Will this be like other recessions or are we in uncharted territory?” Lee asked.
“We are definitely in uncharted territory in a lot of ways, yet some things are very similar. The players and problems may change but the fundamentals are the same.
“The fundamentals are this: Once — we hope and pray — the COVID-19 issues subside . . .we hope that people will get back to spending and living their lives as they were before, including getting back to employment,” Stewart said. “When that happens, it will bring things back. And that’s always the same.”
“For a person who still has a job and can work from home and pay the bills, what’s the best way they can contribute to the overall economy with their $1,200 stimulus check?” Lee asked.
“If you have a real goal of stimulating the economy, you would spend it on goods and services,” Stewart said, “or if you’re really altruistic, actually going out and finding those who have lost their jobs and maybe helping them as well.”
For the week ending Thursday (markets will be closed Friday due to Good Friday), the S&P 500 surged 12.1%. That was its biggest one-week gain since 1974, when it rallied more than 14%. The Nasdaq had its best week since 2009, jumping 10.6%. The Dow soared more than 12% for one of its biggest weekly gains on record.
COVID-19 coronavirus is transmitted from person to person. It is a virus that is similar to the common cold and the flu. So, to prevent it from spreading:
Local resources
State of Utah: https://coronavirus.utah.gov/
The Church of Jesus Christ of Latter-day Saints
Utah Coronavirus Information Line – 1–800–456–7707
National Resources
Centers for Disease Control and Prevention
Commonly asked questions, World Health Organization
Live Mic with Lee Lonsberry can be heard weekdays from 12:30 p.m. to 3:00 p.m. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app