U.S. equities are still not suffering even though the real economic data demonstrates an increasingly bleaker picture, Roger Hirst told Real Vision during today’s Daily Briefing.

What we’re seeing in U.S. assets is price distortion due to Fed liquidity; as soon as you look outside of those assets and outside of the U.S. the recovery is far shallower. The real economy is still relatively subdued, Hirst said, noting that the bond market has hardly moved and while oil has gone up, volumes in oil prices have plummeted, underscoring the massive disconnect between equity market and economy itself.

Hirst said that the market is not yet pricing in the solvency issues that are coming two to three months down the road and that recovery will be an elongated process where the side effects of consumer debt and other issues that existed even before the virus will be felt.

We have to wait and see whether real consumption comes back, Hirst said, but we’re not going to see debt-fueled consumption when reality sets in. He also said that even a marginal change in consumer behavior will push us into lower levels of growth.

To gauge whether the market is discounting for this subdued growth, Hirst said he is watching Eurozone banks, EMFX, and CNY for clues.

“EM equities should rebound if there’s true growth coming,” he said. “You can trade the macro much more cleanly through currency and assets outside the U.S. regime.”