Exposure rates of the Dorval Asset Management Range – 3rd July 2020

The international markets have been trading with no real trends for the past several weeks, and the key question now is the balance between the health situation, support from economic policy and the gradual reopening of economies.

Looking to recent economic activity, statistics over the past few weeks have put in some pleasant surprises, as services PMI stats in China (cf. chart 1), new orders in the United States and job figures all point to a clear rebound in the economy (cf. chart 2). Against this backdrop, the economists’ consensus on growth in the third quarter of the year should be upgraded.



Conversely, the health situation is deteriorating across several states in the US, particularly the southern states and California. This fresh uptick in the number of cases has not yet pushed up the number of deaths, but this seems inevitable. The only reassuring factor at this stage is that Covid-19 mortality rates seem to be declining (cf. chart 3). However, moves to reopen business have been suspended in these states (cf. chart 4), although local governments seem willing to go to any lengths to avoid stringent and widespread lockdown, and would rather take more targeted closure measures, and in particular make masks mandatory, as this seems to have proven its effectiveness.


However, plunging the entire world economy into an induced coma leaves massive scars, pushing up unemployment and weakening businesses, and an economic recovery requires massive and ongoing support from both fiscal and monetary policy. The European rescue plan is still being negotiated, while across the pond the US government has launched talks with Congress on a new series of measures to be implemented by end July.

Impact of Covid on business for local companies

States with increase in cases (Texas, Florida, Nevada, etc.)
United States
States with decrease in cases (New York, Connecticut, New Jersey, etc.)


Against this backdrop, we maintain a sound balance in our portfolios between visible growth stocks and cyclical stocks that are better poised to benefit from a continuation in the recovery.


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