A combination of President Donald Trump’s unprecedented travel restrictions between the U.S. and Europe and underwhelming stimulus measures sparked a fresh exodus from risk assets in global financial markets Thursday.
The rush to gauge the impact on the global economy and corporate earnings, a sense of disappointment at the lack of detail in the U.S. stimulus package and an impression that Washington has fallen behind the curve in its virus response occupied the minds of market participants.
Here is a sample of their views:
Transatlantic Animosity
Sue Trinh, global macro strategist at Manulife Investment Management in Hong Kong:
“All the ‘solutions’ we are seeing from the powers that be are reminiscent of the great financial crisis. Bailing out the zombies while structural issues surrounding allocation of resources remain -- liquidity does not control the spread of this virus. Where are the hospital beds, ICUs, doctors, medical equipment and vaccine R&D?”
On Trump’s measures, “not much he can do without Congress and the Dems don’t want him re-elected. Nothing about canceling large events, increasing testing, no social distancing, so the virus will only become endemic. This is basically further decoupling from Europe - provoking further Transatlantic animosity.”
Won’t Get Better
Jeffrey Halley, senior market analyst at Oanda in Singapore:
“None of this was likely to inspire confidence in the markets, and the story won’t get better this evening when the ECB announces its latest rate decision. What is needed, though, is direct fiscal assistance.”
“Joint action is something that ECB President Lagarde has been screaming for but sadly, appears to be falling on deaf ears of the austerity gnomes. A coordinated rate cut and budget assistance such as the U.K. enacted aggressively, following Australia and the likes of China, Hong Kong and Singapore is the required medicine.”
No Endgame
Stephen Innes, global chief markets strategist at AxiCorp