Our resolve is complete: A message from Michelle Seitz, Chairman and CEO
Amazingly, it was only nine short weeks ago that we mobilized to protect our Shanghai associates and pivot our business in the face of COVID-19. Now, virtually every facet of our lives is being affected. Our future is only as strong as our willingness to confront this reality, however, and I am heartened to see us doing so in spades throughout our organization and our communities.
Safeguarding the well-being of our associates while serving our clients remains my top priority. Around the globe, over 90% of our associates are working from home. A relentless and proactive cadence of personal connections and client outreach is our daily norm as we position ourselves to exceed client expectations and act with the sense of urgency our business demands. We are also constantly updating our Managing Through Volatility page to help our clients navigate these difficult times.
Our call volumes are through the roof as we have replaced in-person meetings with virtual ones, and we are hosting regular client webcasts on current market conditions and portfolio positioning in every region. One of the financial advisors we work with sent us this email yesterday: “When you spoke on the video call about the value we bring to clients, it brought on chills and tears of pride for the work we do. Now is our greatest hour to reach out and serve. Thank you for reminding me of that.” Powerful.
The coordinated actions of central banks and national governments will determine the depth and duration of the global economic downturn. I am increasingly encouraged by magnified fiscal stimulus measures including the $2 trillion stimulus package that was just passed by the U.S. Senate. It is critical to get money quickly into the hands of people and businesses to avoid driving millions into bankruptcy. Notwithstanding extraordinary stimulus packages, second-quarter global GDP is expected to decline 13% or more1 - unprecedented but not surprising. Markets are manically digesting how to discount the sharp economic contraction with the uncertainty surrounding the earnings recovery. As of yesterday’s close, the MSCI All World Index is down 28% from its peak on February 12 and is now at roughly the same level it was in early 2017. For perspective, however, the bull market following the GFC lasted almost 11 years. So even with these recent declines, the MSCI All World Index has still experienced annualized market gains of 7.8% since March 3, 2009.2
We will emerge from this pandemic and China seems to be leading the way. On March 19, they reported that they did not have any new locally transmitted cases of COVID-19. Our associates in Shanghai recently began transitioning back into the office. The timeline for containing this virus will vary by country and region, but we will get to the other side.
Speaking of the other side, this global experience will undoubtedly change the way we live and work. Our personal and professional worlds have collided like never before. I expect this will be a tipping point for permanently mothballing our industrial-age mindset of work. Fully leveraging networks and technology within a globally connected society will allow us to increase productivity, improve lifestyles and reduce our collective carbon footprint. However, this crisis will likely leave an indelible mark on an already serious issue for a ballooning retirement and wealth inequity gap.
I am heartened by many of the grassroots efforts taking place throughout the world. We are showing enormous resolve and resilience. I am grateful to my colleagues for their herculean efforts during this time. We are focused on coming through this stronger than ever. Together.
1 Bank of America Merrill Lynch, Barclays, Goldman Sachs, JP Morgan, UBS (as of 3/25/20)
2 MSCI, Thomson Reuters Datastream (as of 3/25/20)