After two months of a series of shocks to global equity markets, there is a new phase taking root that will drive markets into a new direction. First note that from the start of these equity shocks is was the uncertainty of the new coronavirus COVID-19 that dominated discussions. Secondly the discussions revolved around the virus, the methods of treatment, vaccines and possible cures. And it is important to note that now, in April, people understand much more about COVID-19 so the underlying fear is starting to fade. But now we are seeing a new type of discussion rising and it is all political.
Think about towns and cities opening, governments easing the restrictions, and cities coming back to life in Italy, Spain and the rest of Europe. Europe leads us out with the US and Japan following. Of course we cannot forget South Korea and China – already working to keep people on the streets with wins and losses. The Chinese government closed sports clubs today in Beijing on fears of another spread. This comes after China opened and then closed movie theaters, again on fears of a secondary spread of the virus.
Just to warn you, and give you a heads up on this, there will be political attacks on leaders regardless of their actions. Some members of society, in every country will look through the lens of the next elections – local and national – to take down their least favorite leader. All leaders have made mistakes in the US, China and Europe, and of course here in Japan where we are based. But it is time we work together as citizens by putting aside the differences and being less political and more human.