Retail Savings & Investments in The US: Coronavirus (COVID-19) Sector Impact

Retail Savings & Investments in The US: Coronavirus (COVID-19) Sector Impact

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 significantly impacted the global economy, with key stock markets across the world losing 20-50% of their value for the year-to-date. Many economists and institutions have cut their forecasts, with many experts predicting the potential onset of recessionary environments.

A similar trend is expected in the US, as economic growth is expected to register a dip in the first quarter of 2020 and will decelerate further if the disease continues to spread over the coming months. The decline will have an adverse impact on all sectors, including retail investments.

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 GlobalData’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 15.1% over the course of 2020 as the economy is expected to enter a 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. Retail equity and mutual fund holdings are expected to take the brunt of the economy’s slowdown, with respective declines of 30% and 20% anticipated.
- 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 10% and 8% respectively.
- The effects on the different segments that make up the HNW market will be disproportionate. The manufacturing, retail, and transport sectors - which together contribute 17% to HNW wealth - are expected to take a significant hit as the country remains in lockdown.
- On the flipside, the tech and telecommunications sector, which is the number one contributor to HNW wealth in the US, is better positioned to navigate current challenges as increased internet usage, working from home practices, and a greater need for connectivity will support telcos.

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.