Not much in our universe is a straight line. Even light is bent by gravity. The path of economic recovery is no different. There are setbacks, unforeseen challenges, and a myriad of twists and turns, but recovery is coming. Already, output and activity have increased from the depths during March and April, immediately after so many businesses were essentially shutdown. Some are, unfortunately, being closed again in response to either a resurgence of Covid-19 cases or its spread to new areas.
The pandemic was never going to be conquered by the dramatic actions taken just a few months ago. Science and technology were always going to be a key. Or failing that, increasing immunity when enough victims got it, then survived the virus, imparting herd immunity. That is what happened in past plagues and outbreaks. Fortunately, scientists have promising new therapies and vaccines on the way. Several are going through final testing right now.
In the meantime, herd immunity might be rising. We may have already seen the peak of outbreaks in certain regions. Existing protocols and therapies have gotten better even before many of the new treatments arrive. The ratio of deaths per thousand infected has been trending down. And remember, for every documented case, experts believe that there may be as many as ten times as many not identified – herd immunity?
Stock market investors have already been sensing that recovery is not far off. The market has been doing far better than many would have predicted. It just goes to show that the market itself is the best predictor. It tells us better days are coming and this pandemic may be behind us sooner than feared. Stay steady, my friends!
El Solo Toro