Retail Savings and Investments in the United States of America (USA) - (COVID-19) Impact Snapshot

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the world losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020 and many experts predicting the potential onset of recessionary environments.

The US’s GDP is anticipated to decline in 2020 due to the economic disruption caused by the outbreak of this virus. The US has been the worst hit country so far with over 2 million confirmed cases reported, while the death toll has risen to 120,402 - much higher than any other nation in the world. While the government is easing restrictions the country is seeing a resurgence in new cases across several states, which will remain a key challenge going forward.

This report focuses on the impact of the Coronavirus outbreak on the US economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts the publisher's pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Scope

• US retail savings and investments are forecast to contract by 16.2% over the course of 2020 as the economy entered into recession in Q2 2020 thanks to the impacts of COVID-19.
• The average US portfolio allocates 70% to equities and mutual funds - the most of any country. This being the case, the financial market downturn will have a particularly severe effect on retail holdings in the US. However, the easing of lockdown measures by many states has paved the way for a rise in stock market investments and ultimately resulted in all three major indices increasing slightly from the beginning of April. Yet such a bullish trend is anticipated to be momentary, as uncertainties pertaining to a second wave of the virus outbreak coupled with the adverse effects of trade relations with China continue to exist.
• Despite low returns, retail deposit and bond holdings are set to benefit from a flight to safety away from risk assets, as well as a move away from cash holdings. Therefore, we forecast balances for these asset classes to increase by 8.0% and 11.3% respectively in 2020.
• The effects on the different segments that make up the HNW market will be disproportionate. Although the manufacturing, retail, and transport sectors - which together contribute 16.7% to HNW wealth - are gradually restoring their production processes, these sectors continue to suffer on account of little to no change in demand for non-essential goods.
• On the other hand, the tech and telecommunications sector - which is the number one contributor to HNW wealth in the US - has been successful in alleviating the challenges caused by the virus outbreak as increased internet usage, working from home practices, and a greater need for connectivity continue to support telcos and other tech companies.

Reasons to Buy

• Make strategic decisions using top-level revised forecast data on the US retail savings and investments industry.
• Understand the key market trends, challenges, and opportunities in the US retail savings and investments industry.
• Receive a comprehensive insight into the retail liquid asset holdings in the US, including deposits, mutual funds, equities, and bonds.