The coronavirus pandemic has sent the global economy into a tailspin. Millions of people have lost their jobs, financial markets have been hit hard, and supply chains have faced major disruptions as factories worldwide shut down. In the US, the world’s largest economy, the record-long bull run is over after almost 11 years. In its place, a recession is well underway as the US economy shrank at a 4.8% annualised pace in the first quarter, its biggest slump since 2008. Economists are anticipating a U-shaped recovery, a change from the rapid V-shaped recovery that was initially expected. Many are predicting a significant Gross Domestic Product (GDP) decline for at least the next two quarters of 2020, and possibly extending into 2021 and beyond if the world recovery proves muted.

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Paradoxically, despite dismal economic data and first quarter corporate earnings reports, the stock market has rallied over the past weeks as investors become increasingly optimistic about a potential COVID-19 treatment and the reopening of the economy....