Whatever the magnitude of the shock in Q1, what matters is the strength of the upswing in Q2. Sharp recovery of GDP. Inventory rebuild not to be underestimated. Rise in equities.
Key Points
China did not just halt its economy in February, it also implemented a series of extraordinary stimulus measures
What can we expect from PMI leading indicators in the next few months?
First credible signs of a recovery
Large companies working at 80% of their capacity
Slower recovery for SMEs, at 60% of their capacity
Risks of a drop in international demand mitigated by the desire to rebuild inventories
The world post Covid-19 will want higher inventories