SUMMARY. We believe it maybe be critical to re-open the economies of the world in next 4-6 weeks despite the passage of the stimulus bill recently. The longer this fails to occur the deeper the recession and longer it may take for economic recovery. Rumblings from the US Administration specifically Treasury Secretary Mnuchin point to a possibility of a May opening. The real risks to this will be political in nature as we believe there will be resistance to do so under the cover of health risks, but in reality political forces are the driver.
INVESTMENT IMPACT. We continue to believe drug therapy breakthroughs hold the promise to accelerate a return to economic normalcy & growth. Hydroxycholoroquine & Zpak are playing a role as use spreads, but many other drugs/therapies are in trials too. However, political forces will be a play to thwart the re-opening of the economy by May. We believe the timing is a key economic risk at this point as their are clear signs the Covid-19 outbreak is peaking. This timing will greatly depend on the Trump administration's political capital as decisions to close states was largely dependent on State Governors not the Federal government. So one can appreciate the dilemma now as the Federal govt tries to push forward while its likely some states resist and delay opening. At this point, changes in our model portfolios remains static, but will monitor developments here closely. Additional stimulus is likely as well and needs to be considered.
For more insights see our website and disclosures found there at BCA. As always contact us for further explanation of how these events can effect your finances.