Coronavirus playing an ongoing role Update 12-08-2020

Economic recovery is losing some of its momentum

After a quick economic restart, doubts are now arising about the strength of the recovery.

Very generous income support (especially in the US) is fuelling consumer spending, but is that support sustainable?

No return to normality without a vaccine

There is already talk about a possible second wave of infections in Belgium, while in many parts of the world – including the southern states of the US – the first wave has still not ended.

For large parts of the economy, returning to a profitable level of turnover will only be possible when social distancing is no longer necessary, and that's unlikely until there are sufficient quantities of vaccines.

Reports continue to be hopeful about developing a vaccine, but we are still no closer to one becoming available.

Investment strategy playing safe

Even though the increase in share prices has clearly levelled off, recent coronavirus figures do not seem to have had much effect on the stock markets.

Flattening economic indicators and the downward revision of corporate earnings could change this situation.

We are playing safe by focusing on sectors – such as medical technology, e-commerce, media and software – that support life with Covid-19.

Besides this long-term vision, protection and trends on the financial markets are important aspects too. Your personal investment, which you can see in KBC Mobile and Touch, may have a different composition that takes account of your comfort zone.

Dirk Thiels, Senior Investment Strategist KBC Asset Management
The reopening of the world economy passed off smoothly, but now seems to be stalling primarily because of the ongoing impact of Covid-19. We are playing safe by holding some cash in reserve and opting for growth sectors.

Editing ended on 23rd July 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.