The debate over shutdowns is intensifying. Spain and Italy are winning the first round of the war on Covid 19. There will inevitably be further infections when the restrictions on daily life are lifted. Nevertheless, both countries will by then be closer to herd immunity. Lifting the lockdowns should spark a swift recovery. Now may be the right time to start looking at selective exposure to continental European equities.
The better numbers on infections and fatalities emerging in Spain and Italy lend support for the current UK government’s strategy. A short, concentrated lockdown can break the back of the pandemic. But the health minister has warned that it may be necessary to “to ban exercise of all forms outside of your own home” to win the war on coronavirus.
In the US, the President Trump has warned of the ‘toughest week yet’ in the Covid 19 fight. The S&P 500 will oscillate until the US has got closer to any possible peak for infections.
Even then, the recovery in the world economy is far from certain. The political tensions that have been kept under lock and key during the pandemic will erupt. The ramifications for emerging market countries, with significantly poorer health care systems, are still not fully understood.
Summary
• Italy and Spain numbers yield results
• Time to buy continental European equities?
• UK still in the mire
