Moody's Corporation · NYSE:MCO

Moody's — Moody's Analytics — Getting Back to Normal webinar with CNN Business (September 2020)

25 slides from Moody's's conference presentation, Sep 1, 2020

  1. Slide 1: Getting Back to Normal

    Getting Back to Normal Moody’s Analytics & CNN Business on the U.S. Economic Recovery Annalyn Kurtz - Senior Editor, CNN Business Matt Colyar - Associate Economist, Moody’s Analytics Mark Zandi - Chief Economist, Moody’s Analytics Dante DeAntonio - Senior Economist, Moody’s Analytics September Septe

  2. Slide 2: Agenda

    Agenda » Introduction » Methodology » Back-to-Normal Index Insights » When Do We Get Back to Normal? September 2020 2

  3. Slide 3: Not a V-Shaped Recovery

    Not a V-Shaped Recovery Back-to-Normal Index, early March = 100 100 95 90 85 80 75 70 65 60 55 3/1 3/15 3/29 4/12 4/26 5/10 5/24 6/7 6/21 7/5 7/19 8/2 8/16 Sources: CNN Business, Moody’s Analytics September 2020 3

  4. Slide 4: Methodology

    1 Methodology

  5. Slide 5: What Is Included in the Back-to-Normal Index

    What Is Included in the Back-to-Normal Index September 2020 5

  6. Slide 6: Insights

    2 Insights

  7. Slide 7: More Infections, Weaker Recovery…

    More Infections, Weaker Recovery… 100 75 95 Back to Normal Index (L) 90 New cases, ths, 7-day MA (R) 60 85 45 80 75 30 70 65 15 60 55 0 3/1 3/22 4/12 5/3 5/24 6/14 7/5 7/26 8/16 Sources: U.S. Center for Disease Control & Prevention, CNN Business, Moody’s Analytics September 2020 7

  8. Slide 8: …Across the Country…

    …Across the Country… COVID-19 infections per million residents (X) vs. Back-to-Normal Index (Y), as of 8/26 100 ME R² = 0.1394 SD 90 MT RI VT MI WI CT ID IA MS 80 PA MO NJ GA FL US AL OR VA NM CA MA TX AZ LA NY 70 DC HI Infections per million inhabitants 60 0 5,000 10,000 15,000 20,000 25,000 30,000

  9. Slide 9: …and Particularly in These States

    …and Particularly in These States Back-to-Normal Index, select states 100 US AZ HI NY SD 90 80 70 60 50 40 2/29 3/21 4/11 5/2 5/23 6/13 7/4 7/25 8/15 Sources: CNN Business, Moody’s Analytics September 2020 9

  10. Slide 10: Pandemic Creates Winners and Losers…

    Pandemic Creates Winners and Losers… % change relative to March 1, 7-day MA 25 0 -25 Seated Diners Airport Passengers Rail traffic Mortgage Applications -50 -75 -100 3/1/2020 4/1/2020 5/1/2020 6/1/2020 7/1/2020 8/1/2020 Sources: OpenTable, TSA, AAR, MBA, Moody’s Analytics September 2020 10

  11. Slide 11: …Across the Country

    …Across the Country Back-to-Normal Index, by region, population weighted avg 100 US Northeast South Midwest West 90 80 70 60 50 2/29 3/21 4/11 5/2 5/23 6/13 7/4 7/25 8/15 Sources: CNN Business, Moody’s Analytics September 2020 11

  12. Slide 12: Big Regional Differences…

    Big Regional Differences… Back-to-Normal Index, as of 8/26 Top 15 performers Similar to U.S. average Bottom 15 performers Sources: CNN Business, Moody’s Analytics September 2020 12

  13. Slide 13: …As Some States are Almost Back

    …As Some States are Almost Back Back-to-Normal Index, most recovered states & U.S. 100 US ME SD RI MT WY 90 80 70 60 50 2/29 3/21 4/11 5/2 5/23 6/13 7/4 7/25 8/15 Sources: CNN Business, Moody’s Analytics September 2020 13

  14. Slide 14: Re-Opening Quickly Didn’t Boost the Economy

    Re-Opening Quickly Didn’t Boost the Economy Back-to-Normal Index, select groups & U.S., population weighted avg 100 U.S. Early Reopenings Late Reopenings 90 80 70 60 *10 earliest reopening states vs the 10 latest 50 2/29 3/21 4/11 5/2 5/23 6/13 7/4 7/25 8/15 Sources: New York Times, CNN Business, Mo

  15. Slide 15: PPP Saved Some Firms but Can’t Bring Normal Back

    PPP Saved Some Firms but Can’t Bring Normal Back PPP loans received, % of small business payroll (X) vs. Back-to-Normal Index (Y), as of 8/26 100 R² = 0.0495 ME SD 90 RI MI MT NH VT OH ID CT WA IN MN NE IA GA KS UT 80 NJ AR AL FL DE NC OR MA CA IL TX AZ LA NY 70 HI 60 17 18 19 20 21 22 23 Sources: S

  16. Slide 16: PPP Not a Primary Driver in Return to Normalcy

    PPP Not a Primary Driver in Return to Normalcy PPP loans received, % of small business payroll (X) vs. change in index from 4/17 to 8/26 (Y) 40 VT MI RI R² = 0.019 CT NH MT 30 NJ WI OH IN MN SD MA NY NE WAAK AR MO MS UT 20 IL MD VA OK LA NM GA FL CA TX AZ 10 HI 0 17 18 19 20 21 22 23 Sources: SBA, C

  17. Slide 17: When Do We Get Back to Normal?

    3 When Do We Get Back to Normal?

  18. Slide 18: Getting Back to Normal…

    Getting Back to Normal… U.S. real GDP, 2012$ tril 19.5 Re-openings 19.0 18.5 18.0 Recession 17.5 17.0 Pandemic- Post-Pandemic Recovery Recovery 16.5 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Sources: BEA, Moody’s Analytics September 2020 18

  19. Slide 19: …Depends on an Effective Vaccine…

    …Depends on an Effective Vaccine… Probability, timeframe for 25 million inoculations in the U.S. (8/20) 100 90 After Apr 1 2022 Oct 1 2021-Mar 31 2022 80 Apr 1 2021-Sep 30 2021 70 Oct 1 2020-Mar 31 2021 60 Before Oct 1 2020 50 40 30 20 10 0 4/24 5/15 6/5 6/26 7/17 8/7 Sources: Good Judgment Project,

  20. Slide 20: …An Aggressive Federal Reserve…

    …An Aggressive Federal Reserve… 38,000 1.8 36,000 Wilshire 5000 (L) Federal Fund Rate (R) 1.6 34,000 1.4 32,000 1.2 30,000 1.0 28,000 0.8 26,000 0.6 24,000 0.4 22,000 0.2 20,000 0.0 Jan Feb Mar Apr May Jun Jul Aug Sources: Federal Reserve, SIX Financial, Moody’s Analytics September 2020 20

  21. Slide 21: …and Continued Fiscal Support

    …and Continued Fiscal Support Monthly change in federal debt, $ bil, 2020 1,350 1,200 Stimulus 1,050 checks peak 900 Tax filing 750 deadline postponed Extra 600 UI expires 450 CARES Act 300 150 0 Jan Feb Mar Apr May Jun Jul Aug Sources: U.S. Treasury, Moody’s Analytics September 2020 21

  22. Slide 22: A Long Road Back to Normal…But Not as Long

    A Long Road Back to Normal…But Not as Long Difference between unemployment rate and full-employment unemployment rate, ppt 10 2008-09 Financial Crisis 8 2020 Pandemic 6 4 2 0 Quarters since previous expansion peak -2 0 4 8 12 16 20 24 28 32 36 Sources: BLS, Moody’s Analytics September 2020 22

  23. Slide 23: Further Questions:

    Further Questions: Email us at help@economy.com

  24. Slide 24: Contact Us: Economics & Business Analytics Offices

    Contact Us: Economics & Business Analytics Offices West Chester, EBA-HQ London Prague Singapore +1.610.235.5299 +44.20.7772.5454 +420.22.422.2929 +65.6511.4400 121 North Walnut Street, Suite 500 One Canada Square Washingtonova 17 6 Shenton Way West Chester PA 19380 Canary Wharf 110 00 Prague 1 #14-0

  25. Slide 25: September 2020

    © 2020 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings ri

Moody's Analytics — Getting Back to Normal webinar with CNN Business (September 2020) on 6ix