Despite the resurgence of Covid-19 in countries such as the United States, and its ongoing spread in countries such as Brazil and India, equity markets have remained resilient and have actually risen in the last two weeks. Rightly or wrongly, Covid-19 is no longer the primary driver of asset markets.
Our view is this does make sense: it is apparent there will be no further shutting down of economies and that we are learning to live with this virus, disruptive as that may be. The debate has moved on to the shape of economic recovery and the influence of central bank and government stimulus measures. On both of these issues there is something for everyone, bull or bear. There are regions, such as Europe (ex UK) and Asia (ex India) which have seen a rapid rebound in economic activity, whilst others such as the UK and USA have struggled.