Agnieszka Gehringer ( Flossbach Von Storch Research Institute) | The labor market consequences of the corona crisis have been unprecedented. Roughly 21,4 million jobs have been destroyed within only two months, almost erasing the 22,4 million jobs created after the Great Recession of 2008/09. By comparison, during the Great Recession 8,7 million jobs were destroyed within the 25 months between February 2008 and February 2010
US Moderna Therapeutics has announced the first positive results (in its first phase) of its experimental Covid-19 vaccine. Early findings from a first human trial of the vaccine suggest that it may create an immune response. The objective of the trial, conducted in only 45 people, was to test the safety of three doses with two injections. The firm plans to make a $1.3 Bn capital increase in order to finance the manufacturing process of this potential vaccine at a 5% discount vs yesterday’s close.
Keith Godfrey | “You eat alone, you choke” is an ancient proverb with origins lost in the mists of time. In Mafia circles it expresses their family centred, ruthless sense of unity and purpose and celebrates tight-knit self-propelling interest. And yet, as we know even in the best regulated Mafia families every now and then those interests can pull in different directions. When that happens, the family member breaking ranks is said to “eating alone”. The implication is that bad things will soon follow. And worst of all, whether from lack of protection or because of overzealous protection from outside parties, eating alone makes for bad business.
Mathieu Racheter (Julius Baer) | President Trump recently urged to halt plans of the government’s main pension fund to invest in Chinese equities. While the implications for Chinese ADRs listed in the US should be fairly small, there is a risk that the administration will extend the restrictions to other US investors. We continue to view Chinese equities as a core holding and reiterate our strategic Overweight rating.
Chris Gannatti (WisdomTree) |Artificial Intelligence (AI) is proliferating more widely than ever before, having the potential to influence many aspects of daily life. Crisis periods, like we have seen with the Covid-19 pandemic, are often catalysts for the deployment of new innovations and technologies more quickly. The power of AI is being harnessed to tackle the Covid-19 pandemic, whether that be to better understand the rate of infection or by tracing and quickly identifying infections.
Johann Plé ( AXA IM) | With almost €50 billion in green bond issues since the beginning of the year, the volume remains high. This can be explained by the balanced composition of the universe (50% credit and 50% sovereign and equivalent), which ensures continuity of supply whatever the context. Quasi-sovereign debt issues have thus taken over from the credit segment, whose issues have been bracketed in a particularly risk-averse environment.
Do we save lives or do we save the economy? This is a false dilemma, according to Luis Huete, a lecturer at IESE Business School. The most successful countries at dealing with this health crisis are also the ones in the best position to restart their economies. And vice versa. This graphic speaks volumes.
Trinh D. Nguyen (Natixis) | In response to this, the government announced the first round of stimulus of 0.8% of on-budget cash-handouts to help vulnerable population cope. Additionally, monetary easing also helped through broad and targeted measures.
Mobeen Tahir (Wisdom Tree) | Following weakness in prices around the middle of March, when liquidity needs created acute selling pressures on gold, the precious metal has resumed its strong run this year with more than 13% price appreciation year to date.
David Lafferty (Natixis) | Central banks have pinned the front end to zero – or lower – but real rates and inflation premiums have some room to rise into the recovery phase – as slow as it may be. Yields will also see some upward pressure when the Fed and other central banks eventually begin to slow QE purchases. At this point, the Fed would prefer not to discuss going negative as the overnight market recently priced. Another sell-off or prolonged shutdown might put negative rates on the table, but we’re not there yet.