Global stocks have recovered more than half of the selloff triggered by the coronavirus pandemic since late March – alongside a sharp contraction in economic activity and corporate earnings. We see the unprecedented policy response to cushion the pandemic’s blow as key to support global equity markets – against a backdrop of historic uncertainty for activity and earnings. We still prefer an up-in-quality stance and like economies with ample policy room as we stay neutral on global equities overall.
Key points
- Revisiting Equity Views: We favour up-in-quality equity exposures across regions and style factors even as we stay neutral on global equities overall.
- Key to Policy Response: The key to the policy response has shifted to ensuring successful execution and avoiding policy fatigue before the shock passes.
- China in Focus: Markets will focus on the delayed annual meeting of China’s top legislature, with expectations for more virus relief measures.
The opinions expressed are as of May 2020 and are subject to change at any time due to changes in market or economic conditions. The above descriptions are meant to be illustrative only.