On-line food start-ups, delivery companies and health care ventures are booming in Europe. It is the same story in South East Asia. Data modelling, video-conferencing, surveillance tools, tracing apps, plant-based alternatives to meet, ed-tech, and an array of digital services (gym software, online employee training, e-sports) are just some of the markets that are growing quickly. ‘Status-seeking consumers are racing to high-end stores’ in China as the lockdown ends.
In the Netherlands, ASML, the leading manufacturer of advanced lithography machines, has been very resilient. Online services will push demand for specialist semi-conductor chips (graphics processing) up. Nvidia’s share price has gained 23.1% so far this year.
The global recovery is underway, but how many old economy firms survive remains a big question. Central banks may regret ‘getting into’ the corporate bond market. John Maynard Keynes was a big advocate of quantitative easing and foresaw the need for yield curve control during a time of deflation and recession. But the UK economist was not a fan of corporate bond purchases, arguing that the market is the best mechanism for ‘picking winners and losers’.
Summary
• Central banks may regret corporate bond purchases
• Market best left to decide the winners
• Focus on Oxford trial
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