After the rescue. As we enter the 20H2, Covid-19 is still lurking around, and influencing our social and economic behaviours. The number of new daily cases globally is at a new high. Partly, this reflects more intensive testing. The latter now captures a broader and younger population. 


  • The aftermath of the Global Covid Crisis (GCC), marked by elevated government and non-financial corporate debt, dif-fers from that of the GFC (households and bank debt). Bigger states, interventionism, deglobalisation, QE for longer, more taxes, bond-friendly regulations etc. are all part of the post-GCC world.
  • We analyse ‘new behaviours’ in more depth in our upcoming White Paper: ‘Life after Covid: the LDI view’. They do not bode well for potential growth. The illusion of a V-shape recovery, however, will support risk sentiment over summer.
  • The autumn looks more challenging, as the pandemic might put more pressure on the health systems, the recovery flattens out and political risks rise (“blue wave” at US elections? “Bare bone” Brexit deal?)
  • Because timing market turns perfectly is so hard, we enter summer with an only moderate pro-risk bias, focused on IG Credit. We take selective credit risk: prefer hybrids, AT1 and Fallen Angels to High Yield. Expect corporate defaults to peak below the post-GFC level, but to stay high for longer, while recovery rates risk being lower.
  • We argue against short duration positions, even in the context of the V-shape illusion. Tactically, cyclical stocks are better positioned than Value, but the structural challenge is to source new Growth engines. The US dollar is set to pull back further.


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Investment View Q3:


China's economic recovery continued in Q3 2020, although a bit softer than expected. Real GDP growth rose to 4.9% yoy, slightly below the Reuters consensus expectation of 5.2% yoy, but still a substantial upturn from the 3.2% yoy in Q2. On a quarterly base, growth dynamics softened to 2.7% qoq, after 11.7% qoq and -10% qoq in the two previous quarters.
Citywire video-interview with Peter Marber
Watch Peter Marber, fund manager of this global, non-directional, long/short approach to Emerging Markets debt, in a video-interview by Citywire.
According to the IMF’s Managing Director, strong international cooperation on coronavirus vaccine could speed up the world economic recovery and add $9 trillion to global income by 2025. A WHO trial found that Remdesivir, Hydroxychloroquine, Lopinavir and Interferon have little or no effect on hospitalized Covid-19 patients. Gilead Sciences has questioned the findings of the WHO study saying data appeared inconsistent.