EDITOR'S NOTE
States and cities are implementing lockdown measures to curb the spread of the coronavirus as the holiday season approaches. This, however, will have massive economic ramifications for the U.S. that will reverberate through the start of next year, according to JPMorgan.
JPMorgan’s economists said in a note they expect the U.S. economy to contract by 1% in the first quarter of 2021, making them the first from a major Wall Street bank to officially forecast negative growth to start the new year.
“This winter will be grim, and we believe the economy will contract again in 1Q,” the economists wrote. “One thing that is unlikely to change between 2020 and 2021 is that the virus will continue to dominate the economic outlook. ... Case counts in the latest wave are easily surpassing the March and July waves.”
JPMorgan’s call came as the market faced conflicting news — a batch of positive vaccine developments but rising infection numbers, leaving it struggling to find its footing all week. 
The S&P 500 and Dow Jones Industrial Average posted their first weekly losses in three weeks, while the Nasdaq eked out a small one-week gain.
"The market can see there's light at the end of the tunnel," said Aaron Clark, portfolio manager at GW&K Investment Management. "On the other side of that are spiking cases and the shutdown measures needed to keep that in check. That's what the market's wrestling with."
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