Investors are running in complete blindness

Investors have never had to deal with so much uncertainty as a result of the current health and economic crises, Erik Nielsen, group chief economist at UniCredit, told CNBC’s Squawk Box Europe.

The coronavirus pandemic keeps spreading across the world. Even in certain European countries, where cases had fallen in recent months and their economies reopened, new regional outbreaks have emerged. As a result, predicting the economic consequences of the pandemic as well as the potential government response has become an unprecedented challenge.

Data released Tuesday showed U.S. consumer confidence falling to a more than six-year low in the month of August amid concerns about labor market prospects.

Stringent measures to contain the spread of Covid-19 have impacted businesses worldwide, with many forced to close their doors for months. As a result, unemployment levels are on the rise and there is a question mark about how many companies will manage to survive the ongoing shock.

However, in the short-term, traders seem to be focused on an upcoming speech by Federal Reserve Chairman Jerome Powell, due Thursday.

Central bankers in most economies have announced large stimulus programs in the wake of the pandemic to avoid panic in the markets. That was later followed by some fiscal incentives by governments.

Lawmakers in the United States have been embroiled in discussions over further fiscal stimulus. However, their political differences are casting doubt over whether American citizens will receive further help.

Investors are ‘running in complete blindness right now,’ economist says, CNBC, Aug 26