C-MACC Perspectives No 20
Stagnation – The Worst Scenario?
- The spread and re-emergence of COVID suggests that the “one (and done) wave” thesis was hopeful. We now likely must live with COVID and protect against it until a vaccine is effective, available and widely used. Until then we live differently
- This raises the possibility of economic stagnation for a few years, with government stimulus perhaps preventing a deep recession/depression, but not driving growth. Continued high unemployment globally, credit issues and a subdued/depressed consumer all bode poorly for chemicals.
- With the possibility of prolonged risks to margins and volumes we would avoid companies with a lot of debt and/or a durable focus. HB Fuller, Trinseo, Olin, ASIX and Axalta would be on our watch-list.
See PDF below for all charts referenced