Navigating a 'large but temporary' shock in markets

The market response first, to the Covid-19 crisis, and second, to the huge stimulus packages announced to offset it, has been astonishing.

Savage falls across equities and corporate bonds have been swiftly reversed, with some equity markets a whisker away from all-time highs. How to reconcile a 'sudden stop' in global economic activity, with buoyant financial asset markets, has been a key area of focus for us and many others. Certainly, the shock to economic activity and corporate balance sheets in the near term will be huge - a 30%-50% annualised fall in US real GDP in Q2 would be a consensual outcome. Unigestion's Mollin-Elliott: What will drive the Japanese equity market over the next 12 months? But of course, w...