M&G Valores | Investors are facing great uncertainty about the economy. Chinese economic indicators for February show a depression-like drop in activity: retail sales fell by 20% y-o-y in February compared with normal growth of 10%; industrial production fell by 13%. Even in the crisis of 2008-09 it had not been negative. This is what we will most probably start to see in Europe soon. Obviously, this does not mean that we are heading towards a Great Depression.

Bankinter | To avoid Covid-19 hit was not possible because it is an exogenous factor to the economy, unleashing this hyper-violent reaction as never before. We suspect this is due to the activation of the stop-losses of passive management. The failure of the central banks (mainly the ECB) and the slow and lukewarm reaction of governments have allowed the markets’ own inertia to increase.

The Fed unexpectedly cut interest rates by 50 basis points to a new target range of 1.00% to 1.25% on Tuesday, March 3. But U.S. yields have been falling for some time already. According to DWS, the considerable decline in U.S. Treasury yields last year was mainly due to dwindling real yields. In fact, as much as 130 of the 160 basis points of the nominal yield decline since the beginning of 2019 are accounted for by the real component.

Fernando G. Urbaneja | Economies around the world, and in Europe in particular, have been improving for less than a year, the recovery after the Great Recession peaked, to weaker growth times, including some local recessions (for example in Italy). The causes were known and repeated: trade war, Brexit, insufficient and confused fiscal policies, geopolitical uncertainties. But the “black swan” was missing, the unforeseen that becomes a necessary excuse, the scapegoat, for a trend change and even an end of cycle.