GTC Trendline – First Quarter 2020
Outlook: The economic events of the first quarter of 2020 have been both unprecedented as well as largely unexpected.
No one could have predicted the course of events that were to follow when growth in the entire global economy was brought to a sudden halt as many countries went into total lockdown. The magnitude of the downturn in equities is best illustrated by the MSCI World Index decline of -21.1% and the World Emerging Market Index decline of -23.6% for the quarter.
As the coronavirus gathered momentum the rapidity of its spread took developed markets by surprise resulting in extreme volatility as investors scurried into safe -haven assets. This resulted in sharp declines in government bond yields as well as strong demand for gold. In addition, the Dollar strengthened providing additional headwinds for emerging markets. Added to the situation was a sharp decline in the oil price driven by a marked fall in global demand as well as the confrontation between OPEC and Russian producers.
