A summer of fear and greed

Investment Talks

The big question for investors now is: where do we go from here? In our view, the upside scenario that has been priced in by markets is challenged by the still uncertain path of the virus. Some early market enthusiasm about a virus cure could be overdone, as the path towards a widely available, effective vaccine could be a long time away. Additional stimulus will be needed to offset the demand loss and reduce vulnerabilities in some sectors. The approval of a €750bn recovery fund in Europe, and for additional fiscal stimulus in the US and China, may sustain market sentiment in the short term.

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As we enter the summer, conflicting forces in major equity markets have led to a period of temporary equilibrium between fear(risk of a second wave, low bond yields, high gold prices) and greed (equities rallying as a result of economies reopening).

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Investment Talks

The New Silk Road routes: Why investors should care

Unprecedented times. The global outbreak of Covid-19 has brought the world and its economy to a standstill, highlighting the importance of sustainable and resilient infrastructure (healthcare, water, power, telecommunications). Countries with fragile infrastructure have less capacity to handle crises, so they will need to increase their infrastructure investments. This is especially crucial in the context of health security and rapid urbanisation.