Welcome to Thoughts on the Market. I'm Mike Wilson, Chief Investment Officer and Chief

U.S. Equity Strategies for Morgan Stanley.

And I'm Ellen Zentner, Chief U.S. Economist for Morgan Stanley research. On this special edition of the

podcast we'll be talking about the consumer, pent-up demand, and how might this cycle be

different. It's Friday, May 22nd at 10 a.m. in New York.

Hey, Alan, you know, I'm curious how you think about this recession. It's been so steep and yet we're seeing some pretty good activity already from the consumer and some of the credit card data.

How do you explain that snap back?

And I guess secondarily, you know, how do you think about the stimulus that is going to probably start to taper out around July when the

unemployment benefits start to fade and how should we think about the

consumer once that happens? So yeah the the downturn was so sharp, you know, we've seen now to date around 40 million folks file for a jobless claim.

And so when you've got so much job loss, how is it that consumers are spending at all? Well, we've got a lot of government

support that came through in the First CARES Act, providing those unemployment benefits

that importantly also included the $600 weekly supplemental.

And of course that goes very far to putting food on the table and to providing an offset

to that lost income. So what we've seen is consumer spending has

declined sharply but not nearly as much as we would have seen if we did not get

that support. The good news there is that we are getting more spending. Our

public policy strategists are expecting a CARES 2.0, if you will, to include an extension of several important programs.

And that's important because it buys us more time to get the unemployment rate down more,

bring more folks back to the labor market, and lessen the need for those benefits.

The other part of a recession is there's always pent-up demand, and clearly we have some of that this time.

Where do we think pent-updemand will snap back the most?

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