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Original title: Overseas countries are fighting fiercely against the epidemic, countries must be careful with the “aftermath of the epidemic”
Securities Times Reporter Wu Jiaming
In the recent past, a new round of new corona pneumonia epidemics in many countries has responded fiercely, increasing volatility in foreign equity markets, becoming the focus of market attention. In this context, how should investors view it?
Epicenter of the epidemic in Europe
How fierce is the new round of epidemics in overseas countries? Judging from the current situation, Europe has undoubtedly become the “epicenter” of this round of epidemics.
The epidemic in many European countries has recently been in emergency. France added more than 52,000 confirmed cases on the 25th, the highest level since the outbreak. German Chancellor Merkel said on the 26th that the epidemic situation is serious and that Germany will be “very, very difficult” in the coming months. Furthermore, Spain set a record of 21,000 new diagnoses in a single day earlier. Michael Ryan, executive director of the WHO Health Emergencies Project, said that last week, about 46% of the new confirmed cases of crowns and 1/3 of the deaths worldwide came from Europe, and Europe is, undoubtedly at the epicenter of the epidemic.
The new round of the epidemic has fiercely fought back and, in desperation, European governments have restarted anti-epidemic measures, such as lockdowns and restrictions, to contain the spread of the new corona pneumonia epidemic. Italian Prime Minister Conte said that as of Monday, all bars and restaurants in Italy must close before 6pm. In addition, the stadiums, swimming pools, theaters and cinemas of Italy will also be closed. Spain declared a national curfew and initiated a state of emergency. In addition, the United Kingdom, Portugal, the Czech Republic and other countries have recently introduced stricter epidemic prevention measures.
In the past week, the number of recently confirmed cases in the United States surpassed 80,000 in a single day for two consecutive days. Former US Food and Drug Administration Director Gottlieb warned that the United States is facing a new round of outbreaks and that it may be the worst yet. According to statistics from Johns Hopkins University in the United States, at 11 o’clock on the 27th Beijing time, the number of confirmed cases worldwide rose to 43.44 million and the cumulative number of deaths reached 1,158. .900. There have been more than 7.9 million confirmed cases of new coronary pneumonia in India.
Fight the epidemic or save the economy?
The new round of epidemics in many countries fought back strongly and foreign stock markets “freaked out.” On the 26th, the European and American stocks fell in a generalized way, among them, the Dow fell more than 3% in the intraday and the S&P 500 fell 1.86%. After the opening of the European stock market on the 27th, the British, French and German stock exchanges continued to fall during the session. As the stock market experienced turmoil, investors turned to the bond market. The 10-year US Treasury yield fell once to 0.8%.
The main reason for the increase in volatility in the stock market is that investors are concerned that the prevention and control measures of relevant epidemics will affect the economic recovery again. Therefore, the epidemic and the economy are “multiple choice questions” before the governments of many overseas countries. The reporter combed his hair and found that taking Italy, Spain and other countries with more severe epidemics as examples, comparing the measurements of the first and second waves of epidemics in these European countries, it can be seen that although the newly confirmed cases have repeatedly reached new highs , the second wave The prevention and control of the epidemic is far from the state of the first wave. Conte said that no new national blockade will be implemented.
Some analysts said investors should also treat the new round of epidemics abroad in a rational way. When the new corona pneumonia epidemic broke out at the beginning of the year, countries lacked experience and could do nothing about the sudden spread of the epidemic, causing the rapid global spread of the first wave. Today, the world’s leading countries have accumulated some experience in responding to the epidemic. After the first round of the epidemic, all countries can take better and more determined action to deal with the epidemic. The global stock market, bond market, currency market, and commodity markets are also very likely. There will be no more violent turbulence in March of this year.
Beware of the aftermath of the epidemic
In any case, for some investors, as a new round of epidemics returns abroad, they have begun to expect a new round of “stimulus” from the central bank. This week, the European Central Bank will announce the latest decision on interest rates. Although economists and foreign investors generally believe that the bank will not take immediate policy action, they hope to get more information from ECB President Lagarde before the end of the year. Multi-stimulus signal. Prince, co-chief investment officer at Bridgewater, the world’s largest hedge fund, believes that even after the new corona pneumonia epidemic has passed, economic growth in the United States may be limited. This is because the United States has not hesitated to expand its budget deficit and massively to stimulate economic growth during the epidemic. Printing money. Going forward, US fiscal policy will continue to stimulate the economy, which will only drive increased debt and put pressure on the exchange rate.
At this time some “aftermath of the epidemic” has begun to appear. Let’s take the UK for example: according to data released by the UK’s Office for National Statistics, the size of the UK government’s public debt increased by £ 36.101 billion (approximately $ 46.9 billion) in September alone. Today, the UK government’s total public debt has exceeded £ 2 trillion, reaching the highest level since 1960. The rating agency Moody’s previously downgraded the UK’s sovereign credit rating to the same level as Belgium and the Czech Republic.
Judging from the current situation, China’s epidemic prevention and control situation is better than that of other countries. China’s economic growth in the first three quarters of this year has gone from negative to positive, with a year-on-year increase of 0.7%. In the first three quarters, the total value of China’s import and export goods trade was 23.12 trillion yuan, a year-on-year increase of 0.7%, and the cumulative growth rate of trade imports and exports Exterior turned positive for the first time this year.
Zhongtai ValuesYang Chang, chief analyst of the Institute’s Policy Group and chief economist of the Institute of Public Policy and Governance of Shanghai University of Finance and Economics, said the impact of the new round of epidemics abroad will have some structural impacts. in imports and exports, like exports. Exports of commodities critical to the epidemic, such as textiles and medical equipment, still enjoy some support. However, judging by the recent China Export Container Cargo Index (CCFI), China’s export price index has continued to rise, mainly due to overseas ports. The inventory has not been fully resolved, which may affect the volume of shipping by sea and may cause some disruption to exports. Generally speaking, since the domestic epidemic prevention and control have already laid a good foundation, even if there are some cases imported abroad, it will not affect the good momentum of China’s economic recovery.
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