The market should be more worried about a 'second wave' of coronavirus cases, JPMorgan says

Published Wed, Apr 1 20204:29 PM EDT

(This story is for CNBC Pro subscribers only.) Investors worried about a prolonged lockdown during the coronavirus outbreak should be more concerned about a potential second wave of cases, according to a quantitative strategist at JPMorgan. The iShares MSCI All-Country World Index ETF ( ACWI ) is down more than 24% this year. In 2019, the ETF surged more than 23%. The S & P 500 has dropped more than 20% and is deep in bear market territory after a 28.9% rally last year. Stocks around the world have taken a hit as investors grapple with economic ramifications of the coronavirus outbreak. Many fear the outbreak will lead to an extended period in which the global economy will be shut down, making it harder for it to recover. However, Mixo Das, JPMorgan's Asia equity and quant strategist, said in a note that "a 'second wave' infection is more dangerous for markets than a longer lockdown." More than 900,000 coronavirus cases have been confirmed globally, according to data from Johns Hopkins University. The U.S. is the country with the most cases at over 203,000. China, where the virus first began spreading, has over 82,000 cases confirmed. Countries around the world have imposed social distancing and lockdown measures to curb the spread, including closing down nonessential businesses such as retailers and restaurants without takeout or delivery services. These measures, along with self-quarantine guidelines, have already had a quantifiable impact on the economy, particularly in the U.S. The number of unemployment claims filed the week of March 20 hit 3.28 million, a record. Consumer sentiment also took a hit last month. The weak data and grim economic expectations have led to calls for resuming global economic activity sooner rather than later. However, Das notes that a "large 'second wave'" of infections is his biggest downside risk for the market right now "as it calls into question the 'one-off' assumption (of macro damage) necessary for markets to recover here." He added the market may not even be pricing in such a scenario. "Even in a pessimistic scenario, our Insurance analysts see only a small second wave." —CNBC's Michael Bloom contributed to this report.

People stand in line while wearing face masks in the Elmhurst neighborhood on April 1, 2020 in New York City.

Stephanie Keith | Getty Images

(This story is for CNBC Pro subscribers only.)

Investors worried about a prolonged lockdown during the coronavirus outbreak should be more concerned about a potential second wave of cases, according to a quantitative strategist at JPMorgan.