".... Buying the dip is not such a sure thing against the current backdrop (unless its gold!). The state of play is currently unprecedented and we do not have a good analogue to replicate, so the outcomes and ultimate impact is going to remain a moving target. We are not epidemiologists and don’t pretend to be experts on viral outbreaks, so we stay focussed on the data and until we see some sort of containment and verifiable recovery in economic activity we continue to advocate a more cautious stance....Price action will continue be highly susceptible to virus related headlines as fears ebb and flow. ...As equities face up to the facts, South Korea being an important supply chain centre and key logistics hub remains on high alert level, intensifying the already ongoing regional supply chain disruptions. ....Activity data in China continues to point to an economy running well below usual levels and calls for a rapid recovery are premature. ....We expect price action to remain volatile as the toll of COVID-19 spread mounts and begins to materialise in hard data and company earnings over the coming months, particularly as US political risk steps up a notch...." |