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Markets Update: Investor Sentiment Improves as Lockdowns Lift

2020-05-22

Tony Pasquariello, global head of hedge fund coverage for Goldman Sachs’ Global Markets Division, provides an update on how investors are reacting to the gradual re-opening of the U.S. economy, historic government stimulus efforts, potential vaccine developments, and ongoing US-China tensions. 

This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
Welcome to our exchanges at Goldman Sachs Markets, update for Friday may twenty two ND each week we check in with a leader across the firm to get their quick, take on what they're watching in markets I'm global head of corporate communications. Here at the firm- and today return. Gas is tony passport alone of our global markets. Division walked back to the programme. Johnny thanks Jack I'll, be with you, so we ve seen more more states, United States easing stayed home. Orders in an economic activity, pick up a little bit: how're investors reacting to that trend. So if the market is as true more positive tone recently and optimism around reopening economy, is certainly one of the factors in that equation. So, for example, if we look at a basket of the industry, groups, our most impacted through the so called it. Restaurant airlines who tells gaming
cruise lines theme parks. Those were stocks that came under immense pressure in month of March and ve, tried still be better of late now because anyone who is a twitter feed knows interpretation reopening data is subjective and uneven, but I would argue that most of the news for this week, Major cities like London and New York paints. A positive the trend and investor behaviour reflects that both Institute as well as retail investors. So there's also a lot of discussion around potentially more stimulus measures coming from the federal government unclear exactly what the outlook is there. But what are you hearing from clients around that? Are they baking in an assumption? They'll be more stimulus, so first things. First, in the past few years, have already seen an extraordinary and unprecedented unprecedented response. Monetary side as well fiscal side so well, this large scale acid purchases by FED or this year,
of fiscal packages that have come out of Congress? The collective policy response has been enormous in any historical context. As we look ahead, I clients are looking for potential bull to sustain the trajectory policy, but no big, bangs which we saw in March and April with respect to the FED. We don't since that investors are necessarily expect much more in the near term now there's been some talk around the contours of the asset purchased programme, and perhaps you control further up the road and the FED has suggested they will not remember munition. But again, I don't know Expectations are high, that a big monetary, It will come down in the short term the fiscal side. Clearly, there is still a lot more that could come out of Congress, plenty that is currently up for Debate- witness the bill, put forward by House Democrats that was in the neighborhood
three trillion dollars and that may not pass it does suggest, there's more fiscal relief on the come An investor expectations are broadly in line with that. In recent weeks, tony stocks have risen on news around potential therapeutic treatments, vaccine developments, and then they did when there's some scepticism. Around those results. How stirs, many of whom train Andy me sore or vaccine experts. How do you think staying top of all these we'll trials in all the Medical NEWS, as their investing so I think the sooner you question and is one that I recently discussed with a sun hider is one of a healthier experts. Within research? So here's what we say generally speaking so far, the market It has been somewhat agnostic as to where success comes from. So, for example, market in a general sense has rallied on positive headlines. Around testing it is rallied positive headlines around treatments and it's
we'd unpleasant headlines around back see. So I figured argue that price action tells us that generalists looking at recent developments are positive ones, at least on the initial set of headlines. That said, once the news is hit, there's also been something of a short term fade in the stocks that are most leverage. The news itself, which, like suggest that help your investors, the true experts in the science of all this still reserve some optimism. Until we have more because the results given all the moving parts The number of companies involved are released. Scheme has highlighted a basket approach to treat this theme and that composite has maintained. It's our performance, despite some roads under the hood and we stopping is the best way to combat the trade as a economic data, almost all of it pretty bad,
Piece of news or daddy you're, looking at in in the weekend, that's right. So, apart from what we've already discussed, the monetary policy fiscal policy of the the virus headlines The big story in the market narrative of late has been ten, between the US and China. Is appearing in several different places, baby, had been flung news from the President, the White House, specific policies that are being put forth. More makers as to the equity listings of China. companies in the? U S and the other side of this headlines that are merging of China's annual pc gathering, which is happening right now. The market has dealt with this tension before twenty eighteen and twenty nineteen we saw a moment's attention escalation in you shine relations, the trade war and the terrors associated with that, but one can argue,
this time round the inherent issues are perhaps more complex than just trade and commerce. So tensions arising on a global basis. This is absent. Significant scene which a lively, with us through to the election. In November, which is not necessarily easy for financial markets to calibrate all right. Tony you've been working from home for weeks now, trading from a little bit away from two hundred West Street. What's one work from home hack, you've learned while working remotely so Jake, perhaps not a hack, but I think for all the challenges the curve set up, particularly for those people who are now both working from home. As well as parenting from from work. At the same time, I do there's recognition that some really good lessons have been learned through his period. As my
long time and partner with Patty Raphael, but it flexibility breeds productivity, and I certainly felt that most people are working as much as they did in a normal state, if not more, but the day is more flexible and is more productive without the friction of things like a commute board trips from hundred West tree to midtown. So but that comes more time in the day to get things done and with that certainly comes an opportunity to spend more time with your family so well. I think we all look forward to getting back some semblance of a normal state. I also bet we'll look back at this time. Miss many things and became part of the adjusted routine I hear you on that able to sneak in a little baseball with the kids in the backyard thanks for US returning to that's offer this week's markets update on accession, the Goldman Sachs in case you missed it check out or other episode this week with Margaret, not who headed the firms. Urban investment group. Honesty small business lending during this covid nineteen crisis,
thanks for listening and we hope everyone is staying, healthy and safe, this podcast was recorded on Friday, made twenty second, two thousand twenty extra, all price Princes and market forecasts correspond to the date of this recording. This podcast should not be copied, distributed, published or reproduced in whole or in part. The information contained in this podcast does not constitute research or recommendation from any goal. Insects entity to the listener. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty as to the accuracy or completeness of the statements or any information contained in this podcast and any law
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Transcript generated on 2021-05-19.