NS Macro outlook & Investment Opportunities, 28 April 2020
Due to the COVID-19 pandemic, world economies face the worst peace-time hit to GDP since the Great Depression. Markets have reacted accordingly, with very severe downturns in all risk assets, a dearth of liquidity in the credit space, and a steady flight to safety in long term high grade Government bonds and Gold. Due to the magnitude of the expected recession to come, Central Banks have entered the game. In the famous 1964 French movie ‘Greed in the sun’, one of the main characters says “when 290-pounds guys are speaking, 130-pounds guys listen”. So markets listened to the heavyweight central bankers, who committed to do whatever it took to avoid the lockdowns snowballing effect on the economies. So far, April is a good month for equities, and credit is healing gradually.
In this context, it is obviously paramount to position portfolios for what is coming. This is easier said than done, as it is impossible to have a clear view of what will happen. Nevertheless, this crisis has created opportunities in credit, with the huge dislocation still going on, and in equities, with clear winners and possible long term losers. Active management is often rewarded in this type of situation.
During this video conference, our speakers presented their asset allocation views and portfolio positioning for the weeks and months to come, discussing topics such as stock picking, sectorial trends and long/short investing.
For professional investors only.