As China begins to recover from the Covid-19 pandemic, the world is watching to see how quickly its economy rebounds and whether the same can be expected in other regions.

While China’s recovery appears reassuringly V-shaped, North America’s economic trajectory may take a different turn, warned a CIBC report published on Tuesday.

First, the good news based on data from China. The China Economic Recovery Index, produced by a digital bank in China using mobility and spending data, indicated that the country’s economy is now at 75% of its usual capacity, up from 40% as February ended, the CIBC report said.

CIBC’s estimates for retail sales and industrial production suggest a decent Q2 rebound in China after Q1’s big contraction.

In comparison, North America may not exhibit as quick a recovery. One factor working against the region is a lack of an obvious centre for the outbreak, comparable to Wuhan. As such, “larger areas of [Canada and the U.S.] could be under strict social distancing measures for longer,” the report said.

Another negative factor is the big rise in unemployment, with forecasts for unemployment in Canada and the U.S. at about 6% and 8%, respectively, in Q2 relative to Q1.

In China, where state-owned enterprises are still big employers, the country’s unemployment rate rose by 1% in January and February, compared to December, the report said.

Canada will also be challenged as a net exporter of oil, the report noted, with low oil prices impacting investment and hiring in the sector. The U.S. will similarly take a hit, given its large investments in shale production. China, as a big net importer of oil, will benefit from lower prices.

Based on these factors, North America could have a more uneven recovery, the report said. That could disappoint financial markets, which “appear to be looking past the scale of the near-term contraction and toward what the recovery will look like.”

With recovery uncertain, some investors are taking a long view, including Grant Bowers of Franklin Equity Group.

In a recent blog post on U.S. equities, Bowers said that while concerns about unemployment and changing consumer behaviour have likely been discounted into current equity valuations, “uncertainty about the timing of earnings recovery means it is still too early […] to say the market is broadly cheap or that we have seen the bottom in equity prices.”

What is clear is that the market is discriminating based on fundamentals, he said, “whether they be high leverage, interest rate sensitivity, oil price exposure or significant revenue disruption, to name a few.” Bowers also noted that staying at home may be increasing the adoption of digital transformation.

Bowers said he looks for “high-quality, long-term growth companies that are well-positioned for the future,” which means they’re “levered to multi-year growth trends and disruptive innovation themes.” These companies included names in tech and healthcare.

For full details, read the report from CIBC and the blogpost from Franklin Templeton.