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It seems as if, in Australia and New Zealand particularly, there are increasing expectations around the lifting of social distancing and lockdown restrictions. Whether it be the re-opening of schools or the resumption of limited sporting competitions, or it's simply the number of people with whom we can meet and greet - albeit at arm's length or more.
However, we have been incredibly lucky in Australia to have avoided the worst of COVID-19 - at least from a medical perspective. Oversees the infection rates and death tolls have been truly devastating, initially in Italy and Spain, and subsequently in the UK and the USA. With this in mind we spoke with two of our "regulars" this week, namely Monik Kotecha from Insync Fund Managers and Chris Watling from Longview Economics, to get their take on how companies, markets and economies might emerge once the lockdown is over.
Unfortunately, the quality of Zoom videos for both interviews wasn't what we would like it to have been so we will produce full transcripts of each interview and publish them as "Insights" articles early next week.
However, what was interesting was their different take on what lies ahead. Monik was looking at it through the prism of secular trends and the global "mega" companies in which Insync invest, while Chris Watling from Longview was naturally considering the global implications and the effects on consumers and small companies, or those with high levels of debt which might be more severely damaged by the pandemic.
Insync are optimistic that the pricing of companies in which they invest is not unreasonable. Longview are questioning the extraordinary bounce in global markets since the March lows, and what lies beyond Q3 when life might have returned to a near-normal state.
As Hedge Clippings views the future, while we can see the lockdown being eased both here and overseas, we can't see a return to normal until a cure or, failing that, an effective vaccination is found and deployed around the globe. There is also the significant risk of a second, and possibly third, wave of infections. It also seems that there is a huge amount that is not known about the disease, and unless and until the Chinese government agrees to release information about its source, this is likely to remain the case.
Come to think of it, the Chinese government's intransigence and reluctance to have any kind of open dialogue on the matter seems inevitable. While that is the case, the possibility of a further outbreak or other outbreaks of as yet unknown diseases remains high.
So, maybe for the foreseeable future at least, we live with the threat.
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