CIBC Asset Management Perspectives A shock to the system

It ll be some time before we know the ultimate scale and duration of the COVID-19 disruption to economic activity and corporate cashflows. But in a move reminiscent of the Global Financial Crisis, we re encouraged to see central banks have stepped into help by rolling out some of their heaviest artillery.

Asset class highlights
Equity

If the past is any guide, global equities will bottom well before a bottom in the global economy. Equity markets in 2009 hit their lows months before the worst data for employment and production.

Fixed Income

The U.S. Federal Reserve (Fed) will use unlimited quantitative easing to improve liquidity conditions, alleviate private sector funding pressures and limit Treasury selling by foreigners. To achieve these objectives, 10-year Treasury yields will have to trade between 0.5% and 1.25%.

Currencies

As the Fed takes measures to address the USD funding squeeze, the upward pressure on the USD will ease and the greenback will come under intensifying selling pressure.

China

To engineer a more V-shaped recovery, Chinese policy-makers will deliver more stimulus. This will include incentives to boost consumption and target infrastructure, particularly high-tech investment. Policy-makers are seeking not just a short-term cyclical revival, but progress towards long-term development objectives.

Read Perspectives Report
Perspectives Executive Summary
UPDATED! 10-year Long-Term Capital Market Returns
Perspectives Video Commentary with Luc de la Durantaye
Forecasting an Economic Recovery, podcast with Luc de la Durantaye
Back to Timeline View
Contact Us
Accessibility at CIBC
Text Size: font size minimizing activefont size minimizing inactive font size maximizing activefont size maximizing inactive

DoubleLine® is a registered trademark of DoubleLine Capital LP.

Copyright 2024 CIBC Asset Management Inc. Renaissance Investments and Axiom Portfolios are offered by CIBC Asset Management Inc.

Renaissance Investments family of funds the Axiom Portfolios, the CIBC Private Pools, the CIBC Fixed Income Pools, the CIBC Fixed Income Funds, the CIBC Alternative Funds and the CIBC ETFs are managed by CIBC Asset Management Inc., a subsidiary of Canadian Imperial Bank of Commerce. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments.

Please read the simplified prospectus before investing. Mutual fund securities are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer, nor are they guaranteed. There can be no assurance that a money market fund will be able to maintain its net asset value per unit at a constant amount or that the full amount of your investment will be returned to you. Their values change frequently and past performance may not be repeated. ®Renaissance Investments, ®Axiom and ®Axiom Portfolios are registered trademarks of CIBC Asset Management Inc. Renaissance Investments is offered by CIBC Asset Management Inc.