The current mood in the equity markets reminds us sometimes of the song by the Clash : “Should I stay or should I go now? If I go, there will be trouble. And if I stay it will be double. So come on and let me know …”. While still down 14% since the beginning of the year as of Wednesday this week, Stoxx 600 has rallied an impressive 28% since the through on March 18th. There is a sentiment that the fear of missing out (FOMO) is driving back many (often retail) investors into the equity markets.
However, while economic sentiment is clearly improving, the battle against the COVID-19 is far from won and the economic damage caused by the pandemic should not be underestimated.
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Léon Kirch, CIO & Partner