The European Response to COVID 19 and the Feedback Loop to Asia.

Mark Artherton, CFA

Inteqres

Thematic (Sector/Industry)

Macau Financials / Thematic (Sector/Industry)

Europe is officially in crisis.  Borders are closed, shops are empty and lockdowns are growing.  Fear driven by social media and the press is clearly in charge and policymakers appear to be behind the curve.   We take a look at the data, policy responses, and market reaction.
There is a growing risk of a U shaped recession and an outside risk of depression caused by fear and a social media led overreaction function.  Policymakers and corporate management have some terrible choices to make, as the remedy currently at play in Europe and the US may actually end up being worse than the disease.
Whilst certain countries in Asia have capped the virus, we do not see Asia escaping the global economic consequences of possible errors in the west.
We believe that Italy is the most important country in the world for investors at the moment and it is here that we see a ray of light at the end of the tunnel - we hope it isn't just a train coming the other way.

Europe is officially in crisis.  Borders are closed, shops are empty and lockdowns are growing.  Fear driven by social media and the press is clearly in charge and policymakers appear to be behind the curve.   We take a look at the data, policy responses, and market reaction.
There is a growing risk of a U shaped recession and an outside risk of depression caused by fear and a social media led overreaction function.  Policymakers and corporate management have some terrible choices to make, as the remedy currently at play in Europe and the US may actually end up being worse than the disease.
Whilst certain countries in Asia have capped the virus, we do not see Asia escaping the global economic consequences of possible errors in the west.
We believe that Italy is the most important country in the world for investors at the moment and it is here that we see a ray of light at the end of the tunnel - we hope it isn't just a train coming the other way.

Coronavirus - An Unexpected Positive Ray Of Light From The Epicentre - Inteqres