Will protests and looting permanently damage the economy?

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The civil unrest sweeping the country stemming from the senseless killing of George Floyd by Minnesota police may not permanently damage a U.S. economy reeling from the COVID-19 pandemic, but it could influence investment decision-making in the near-term.

“The timing could not have been worse. All of a sudden we have 90% of the population in the U.S. in a phase back state, and now you are trying to reopen the small businesses and the social unrest really derails the economic recovery. I think more than anything it pushes [the recovery from the COVID-19 pandemic] back. I don’t think this is going to be something that permanently hampers economic output, but it really makes concerns,” said Deutsche Bank Wealth Management Americas CIO Deepak Puri on Yahoo Finance’s The First Trade.

Puri still sees the S&P 500 reaching 3,100 this year in the face of the macroeconomic risks from the social unrest and upcoming presidential elections. The U.S. economy is likely to expand by 5.6% in 2021 after falling by a similar amount in 2020, according to Puri’s work.

Despite the upside S&P 500 target, Puri is advising clients to be cautious at the moment.

FILE - In this Monday, Jan. 11, 2016, file photo, specialist Anthony Rinaldi is silhouetted on a screen at his post on the floor of the New York Stock Exchange. A smoother ride for stock investors sounds like a no-brainer given this year’s big swings for the stock market, but the “low-volatility” funds pitched by the investment industry come with their own risks. (AP Photo/Richard Drew, File)

“Cash has taken a more bigger and prominent role in your asset allocation, no doubt about that. I think people realized that even though it’s not to generate much a return, the safety aspect of return on your principles has at times over the last three months taken precedence over a return on capital,” Puri adds.

Investors continue to overlook the rising number of risks the U.S. economic recovery.

The three major indices turned positive Monday morning after opening slightly lower. The Financials and Consumer Discretionary sectors paced the gains in the S&P 500, while Boeing, American Express and Goldman Sachs led winners in the Dow. Investors also plowed into high beta tech names such as Tesla, Zoom Video Communications and CrowdStrike.

Indeed, the bullishness to kick off the week has left some on the Street scratching their heads, and advising investors to be careful in the trading sessions ahead.

“I’m hugely surprised. I woke up this morning thinking I really don’t understand the markets. Between everything going on, I don’t really understand why it’s positive this morning,” said AdvisorShares CEO Noah Hamman on The First Trade. “So I’m nervous for those who are buying. I’m nervous for people seeing this being the bottom right now.”

This article was originally posted on finance.yahoo.com/news/.

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