Covid-19 being gradually brought under control Update 13-05-2020

We are slowly but surely getting the better of coronavirus

Following China and South Korea, the virus is now being brought under control in Europe and the US too.

The quarantine measures are having their intended effect.

How do we exit lockdown?

Countries will look at their own individual situation to see how they can safely reduce lockdown restrictions.

Limiting the economic impact while minimising the risk of a resurgence in the virus remains a difficult balancing act.

Success depends on testing capacity, with lockdown only being lifted for good when a vaccine is rolled out.

Stock markets are (overly) optimistic

The economic impact is enormous: many countries' national income in the second quarter will be 15-20% lower than the corresponding period last year, while company earnings will fall to an even greater extent.

The measures taken to support the economy are huge, even surpassing those taken in 2009.

Uncertainty remains, but stock markets have risen more than 25% since their low point.

Dirk Thiels, Senior Investment Strategist KBC Asset Management
"We are keeping shareholdings below their benchmark level and selecting defensive sectors (such as food producers) and companies that are contributing in the positive sense to life in lockdown (which include medical technology, e-commerce, media and software)."

Editing ended on 23-04-2020. This document is a publication of KBC Asset Management NV (KBC AM). The information in it can be changed without notice and offers no guarantee for the future. Nothing in this document may be reproduced without the prior, express, written consent of KBC AM. This information is governed by the laws of Belgium and is subject to the exclusive jurisdiction of its courts.