Exposure rates of the Dorval Asset Management Range – 13th March 2020

The stock-market crash over the past few days has primarily been a result of panic surrounding management of the current extensive – but albeit temporary until we see proof to the contrary – health crisis.

Despite some hesitations from the European Central Bank on Thursday, March 12 (which it very quickly corrected), the global monetary and particularly fiscal response has been massive and fast-changing. Based on the experience in China and South Korea, we can expect the epidemic of new coronavirus cases in Europe and then the US to peak by around mid-April. We think that the equity market should bottom out – if it has not already done so on Thursday March 12, 2020 – before this peak in the epidemic, so several weeks before the peak of the economic impact (cf. chart 1).

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