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Investment Markets and Coronavirus

The UK’s main market struggled to hold onto this morning’s early gains – at one point dropping to a 1% or so loss.  At the point of writing the index has moved back into positive (1% plus territory).

The gains were driven by positive support messages from the Bank of Japan (BoJ) and the Federal Reserve (FED).

The information coming from China is that the factories are back up and running, although not fully staffed, or producing normally ….

In an earlier article on Bloomberg, commentators talked about ‘Stocks being on sale’ at present, so panic and selling out is likely over the long term to be damaging – so the message is to stay on the investment track – as the issue with the ‘markets’ concern is the impact on ‘Growth’ – rather than being a ‘society structural change’, for the long term.

Economic Support from Central Banks

A fiscal response from Central Banks (especially in Europe) as an interest rate cut is not likely to increase borrowing – so a mixture of ‘easing’ and support is likely to be required.

The news flow in relation to virus transmissions is likely to get worse in the western world – before it gets better – with a re-rating on price earnings likely to reduce further.

Click the link that appeared on Bloomberg earlier that may help to explain the thinking (currently) of leading experts – Professor of Virus Genomics, Paul Kellam, Imperial College London, provides his views:https://www.bloomberg.com/news/videos/2020-03-02/coronavirus-the-long-slow-process-to-finding-a-vaccine-video

We also provide a link to an Evening Standard article – Top Health Chief warns major UK outbreak is ‘highly likely’ – click the link to read the article:

https://www.standard.co.uk/news/health/london-cancer-medic-coronavirus-victim-major-outbreak-highly-likely-a4375931.html

As always, if you have an ‘advice’ issue – get in touch.

Warm Regards.

Best Price FS Team

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