Morning all.
Markets on the rise this morning, latching on to the positive manufacturing data from China, but also extending on the strong end to the session in the US yesterday.
I think the optimism surrounding manufacturing pickup in China should be viewed with caution. In February they were effectively closed for business so it’s no wonder that there would be a rebound the moment that things starts to open back-up.
This will correct some of the supply-side issues that were a big focus when China initially started their lock downs, but now that the virus is spreading and many countries around the world have started to enter lock down conditions as March has progressed, a big issue for April is going to be a collapse in the demand-side of economies.
Europe is locked down and extensions to these conditions are likely, India now in lock down with 1.3bil population, parts of Africa now starting to get concerned and the USA slowly starting to face reality.
I saw this last night in an article on CNBC, and I feel this is just a taster of the US needing to force people to take things more seriously.
” Maryland Gov. Larry Hogan issued a stay-at-home order Monday and said those who violate it will face misdemeanor charges and could face up to a year in prison and a $5,000 fine.”
The current market optimism is great for recovering some drawdown, but I’m not jumping to invest any spare capital thinking it’s recovery time now.
There is also expectation of more fund rebalancing today and maybe that keeps equities on the front-foot for longer. If some more profits offer themselves up I will take them and accept a better cash position for now.
Stay safe, thanks for your time.
$China50 $GER30 $SPX500 $NSDQ100
