Stormy sea
Many people go to the sea to clear their heads. I have spent the past week on one of Germany’s North Sea islands to do exactly that and the strong winds certainly helped.
Key takeaways:
- Not even a trip to a North Sea island helps you clear your head fully these days. The US presidential elections and Covid-19 remain constant companions.
- For investors, staying the course remains the right strategy, even though the sea might get a little bit stormy.
Walking along the beach, I was impressed by the accuracy of the information provided, e.g. the times of sunrise and sunset, the wind speed, and the times of ebb and flow. As a financial market professional, one appreciates this degree of accuracy because we are not used to it. Especially not when the economic environment is blurred by politics. Of course, I could not escape the noise around the US elections, which overlapped with the regular Covid-19 news flow because of the president’s infection. Could there be a bigger contrast than that between the laws of physics and the laws of politics?
Carsten Menke, Head of Next Generation Research, shares his view on the markets.
At least, we will be spared from this week’s presidential debate after Donald Trump refused to battle Joe Biden virtually. From that perspective, it looks like Covid-19 has not reached US politics, considering that for most of us an even bigger part of our lives has shifted from offline to online. Maybe a virtual debate would have been the better format anyway? With less than one month to go before the elections, we have updated our outlook and believe a blue wave is becoming increasingly visible. Joe Biden becoming president and the Democrats winning the House as well as the Senate could create quite a storm in financial markets if Donald Trump does not accept the results. How about President Trump’s hopes of a vaccine before the elections? This is very unlikely to happen and, even if it did, more than half of the US population would not want to use it.
Staying around the North Sea shores, this week will bring more news about Brexit as European leaders meet for their summit. The stakes are high, considering that the summit is seen as the deadline for agreeing on a free-trade deal with the Brits. Clear heads would certainly help here – as they always do when it comes to investing. Staying the course remains the right strategy in our view even though the sea might get a little bit stormy during the next few weeks.
The government estimates domestic travelers generated around 466 billion yuan in tourism revenue during Golden Week. China is celebrating the estimates as a rebound for its domestic travel industry.
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