“ The only function of economic forecasting is to make astrology look respectable.”

JK Galbraith

The market relief is only likely to last so long, and attention will soon turn to how countries intend to exit the current containment measures, which will have in effect put the pause button on the global economy.

Governments and central banks around the world have turned on the fiscal and monetary stimulus faucets on a colossal scale in a bid to shore up the global economy against the fallout from the pandemic, which has also offered markets some momentum and reduced volatility.

The below graph illustrates the quarterly annualised growth rates in the advanced economies bottoming in Q2 2020 and rebounding in Q3 2020.

Source: Rahil Ram – Fulcrum Asset Management
Source: www.cnbc.com

Markets will be able to assess the damage caused by the pandemic more accurately when earnings season kicks off this month in the US. We believe there will be winners and losers as a result of the economic fallout. BAM continues to communicate regularly with the managers of those funds in Mazarin, to ensure that they are positioned correctly and are aligned to our views in order to take advantage of any recovery going forward.