Real Vision's Daily Briefing - Oct 19, 2020 - Will the COVID-19 Surge Lead to Market Déjà Vu?
Ash Bennington is joined by Ed Harrison to interpret how the rising COVID-19 infections in Europe and the U.S. will impact markets.
- The rising COVID-19 infections in Europe and the U.S. will impact markets; the countries that fare best economically will be those that are most successful at containing the virus, like China, New Zealand, and Norway.
- China has regained all of the ground they lost in the first half of the year and now they’re back to the races again. Their remarkable GDP growth could be related to their containment strategy.
- Markets in the U.S. are beginning to price in whether there’s a high or low probability that an additional stimulus deal will be reached.
- Economists are warning about a potential double dip recession in Europe, where the virus is flaring significantly, and similar downside risks also exist in the U.S.
- The downside risks of lost production and lost consumption in the U.S. are negative for risk assets but bullish for assets like U.S. treasury securities.
- The knock-on effects are financial instability and financial crisis, especially with the possibility of no stimulus, and they’re likely to persist for a long time.
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