In her latest market update Kristina Hooper, Invesco’s chief global market strategist, explained that Brazil is now the global epicentre of Covid-19 rather than the USA, with India and Pakistan emerging as ‘hot zones’.
She added that America’s infection curve had flattened and reports indicated that consumer confidence was returning there sooner than predicted at the start of the pandemic.
‘What is really interesting is what we are seeing is that perceptions, particularly in the US, about the pandemic are changing,’ she said. ‘We spent a lot of time at the start of this pandemic wondering what kind of paradigm shifts there might be and what changes in consumer behaviour would be lasting.
‘And what is surprising is to see how quickly risk aversion has eroded in consumer surveys.
‘Just a month ago, for example, about 80% of consumers surveyed said that they would be afraid to go on a cruise. That has come down to 70% in just a few weeks.
‘That is still very high but what we are seeing in a variety of different areas is less risk aversion and that has happened much more quickly than we would expect.’
Ms Hooper, who is based in New York, said that the recovery from the economic damage caused by the virus was dependent on a ‘variety of different factors’.
‘It’s going to be dependent of course on the monetary response [changing interest rates and the supply of money], but more importantly the fiscal response [tax and spending],’ she said.
‘And of course the health policy response. That means a level of stringency that can stamp out or at least control the spread of the virus, without being so stringent that it hampers the economy for a long period of time.
‘And there is of course another element to this, which there was not in the global financial crisis, and that is the development of therapies and vaccines to treat the virus.
‘That will play a role in what sort of outcome we will see in the US economy and the global economy.’
Jersey’s Chief Minister John Le Fondré recently said that his government is due to announce a package of fiscal stimulus potentially worth tens of millions of pounds in the coming weeks, with the aim of implementing the measures over the summer.
