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Ahmet Feridun: Monday markets - the week ahead on 2 March

We still believe the spread of the coronavirus will delay rather than derail the global growth recovery. In the near-term governments and central banks can be expected to respond as far as possible to help avoid the risk of recession.



Ahmet Feridun
Deputy Chief Investment Officer
  • The MSCI World index gave up four months of gains in five days at the end of February – falling over 10% in dollar terms and making it the worst week for global equities since 2008.
  • Global bonds saw strong returns as yields fell, with the 10-year US Treasury yield falling to its lowest-ever close at under 1.15%. The UK Gilt yield also fell close to its lowest-ever level finishing at 0.44%.
  • Gold, surprisingly, fell over the week as investors were forced to sell to cover their losses in other asset classes.
  • Overall, the outbreak of the virus is likely to continue to foster fear as well as meaningfully disrupt global supply chains and trade, leading to softer economic data and volatile markets.
  • We believe that it will delay rather than derail the global growth recovery that we had begun to see at the beginning of the year.
  • In the near term governments and central banks, which have already demonstrated a  willingness to keep ample liquidity flowing through the economic system, can be expected to respond as far as possible to dampen the deflationary effect and help avoid the risk of recession.
  • Yesterday the Chinese purchasing manager index numbers for February fell significantly. Similar data for the US and Eurozone will be released over the coming week, although the virus's negative impact is likely to be lower in these regions at this stage. The US also sees the release of unemployment data towards the end of the week.

US Presidential elections 2020

The 2020 US Presidential nomination race heats up on “Super Tuesday”, with fifteen states holding contests for the remaining Democrat candidates. Bernie Sanders is the current front runner according to the Predictit website, although Joe Biden’s popularity has increased over recent days after Pete Buttegieg’s withdrawal from the race over the weekend.

This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 

Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.

This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.

All data contained within this document is sourced from Cazenove Capital unless otherwise stated.


Ahmet Feridun
Deputy Chief Investment Officer


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