As we progressed through the pandemic induced recession, there have been much discussion about a second wave. Second waves appear in many forms, and they can threaten the current consensus expectation of a V-shaped rebound.
Here are some of the second wave risks the market faces.
A second wave of COVID-19 infections
A second wave of layoffs and wave cuts
A second wave of bankruptcies
Finally, investors have to face the risk of permanent economic scarring that impair long-term growth potential. Under that scenario, slower growth rates will persist even after any recovery, and affect asset prices in ways that the market hasn't fully discounted.