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UBS lays out how a 2nd-wave coronavirus lockdown could lead to a devastating situation for stocks a?? one Wall Street has been warning about for months

UBS lays out how a 2nd-wave coronavirus lockdown could lead to a devastating situation for stocks a?? one Wall Street has been warning about for months
JOHANNES EISELE/AFP/Getty Images



UBS strategist Bhanu Baweja warns of a potential stock-market tail risk that involves an inflationary spike resulting from the coronavirus pandemic.




Baweja cites historical evidence from the post-WWII period, which featured a similar confluence of "supply shortages, solid income growth, high fiscal debt levels."




He also argues that a second wave of lockdowns would make an inflationary supply shock even more pronounced.




Prior to the COVID-19 outbreak, a slew of renowned investment firms were already warning about the potentially dangerous and often overlooked prospect of inflation.




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There's no denying that the coronavirus has remained stubbornly at the forefront of investor attention.
The US recorded a record number of new infections just this past Thursday. And although many states are trudging forward and reopening portions of their economies, some are already having to reverse course. Others are expected to do so soon.
That's leaving many wondering: What happens if another widespread lockdown is implemented?
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