There is nothing normal about the nature of this cycle. We have never seen a health crisis morph into an economic crisis by virtue of a government-mandated full-stop shutdown. The S&P 500® index dropped 34% from February 19th to March 23rd – and then rebounded almost as swiftly.

In keeping with the high-speed nature of this crisis, the National Bureau of Economic Research (NBER) recently declared that a recession began in February. It was the fastest decision in the 40-year history of the NBER’s recession declarations. A big question now is how the NBER will determine the end of this recession—the severe depth of it means that certain economic data will likely look dire long after a trough is reached.

With the economy cycling at warp speed, what do we expect for the second half of the year? It’s especially difficult to make forecasts during a global shock like the COVID-19 pandemic, but here’s what we know now:

A clean V-shaped U.S. economic recovery is unlikely

The stock market may have gotten a bit ahead of itself in pricing in a V-shaped recovery. The increase in volatility in June has been related to rising COVID-19 cases in a number of U.S. states. Stocks may continue to be at the mercy of virus-related news—both positive and negative.

In terms of the economy’s recovery shape, we believe the remainder of this year is likely to look more like rolling W’s than a clean V. Even if rising coronavirus cases don’t lead to renewed shutdowns, a slowdown in the recovery should be expected based on the impact of weaker demand and constrained supply. Second-quarter earnings season may be an eye-opener—not just what’s reported for earnings in the quarter, but what companies say about their second half outlooks. Given that one-third of S&P 500 companies have withdrawn earnings-per-share guidance for 2020, any color will be helpful in shaping views about the shape of the recovery.

Longer-term, the U.S. economy may be starting a secular shift from services/consumer-led growth toward more investment-led growth, in areas like health care, technology and supply-chain manufacturing. The expected growth sectors currently employ nearly 40 million people—nearly three times the 13.7 million employed by the expected contraction sectors, such as restaurants and classic retailers. That’s good news, but if the economy is transitioning from having been nearly 70% driven by consumer spending toward investment-based drivers, the ride is likely to be bumpy.