The outbreak of the coronavirus (COVID-19) has led to a service sector shock with a severe and immediate shakeout of the labor market. The policy response has been fast and aggressive, with a significant fiscal response in Europe and the US. Countries are still at different stages of the outbreak and the question remains if there will be lasting economic damages. Nick Mannion believes there will be a V-shaped or U-shaped recovery since the policy response is faster and larger than in 2008, which can mitigate the negative economic effects. Markets seem to be focused on infections rates and are responding to the good news from China and Italy. However, social distancing will likely need to be in place for a while and it remains to be seen how the world economy will be affected by a lower global demand.