What the markets are still underestimating about COVID-19?

Thursday 26 March 2020

CFA UK Insights

Author:Joanne Frearson

Will Goodhart Chief Executive of CFA UK talks to Gerry Fowler, CFA FSIP, Investment Director of the Absolute Return Funds at Aberdeen Standard Investments about what is ahead for the markets amidst COVID-19 and if we are past peak panic 

Since cases of COVID-19 started emerging around the world, investment professionals have been dealing with demand and supply shocks, followed by liquidity and volatility shocks. 

“What we have seen is one of the most rapid breakdowns in global economics and markets functioning that I have witnessed and I think anyone has witnessed in their careers,” says Fowler.  

Although Fowler thinks government stimulus packages are bringing an end to the peak panic stage and market functioning might return, he does not think we are out of the peak pessimism phase. 


“We are staring down the barrel of something that is going to look like a very deep recession or potentially almost depression,” says Fowler. 

He thinks the markets are underestimating the problems we are facing in the next couple of months. 

“I still sense citizens and investors believe this to be a few month problem and then we snap back to normal life,” he says. “It is important people read some of the scientific research like the Imperial study, that suggests this is unlikely to occur. That would be our best-case scenario, what is much more likely we are living with this for the next year. “


This article was recorded on Tuesday 24th March over Zoom. 


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