If we are at or below this number by this Sunday, then the peak of the virus should be in just a few weeks’ time. This research comes from a quant analyst at a Hong Kong hedge fund! The analysis breaks from the usual number crunching, but from an investment perspective is just as, if not more important than predicting say inflation or economic growth – so this fund certainly won’t be the only ones crunching the numbers and working out when their buying opportunity is likely to be.

Of course, that analysis is only as good as the raw data and this is where things could become unstuck and there is still widespread criticism that China’s reporting of cases isn’t accurate or timely. 

Despite the hopes that this might be readily contained, the immediate impact it’s having on supply chains is becoming painful. The FT has an interesting article on the subject and points out that in the tech space, the Chinese supply chain is pretty close to a just-in-time model. This means that there could soon be empty shelves in other parts of the world because of it.

The market is back to taking a rational approach to the situation though. Having had the knee jerk sell-off last week, we’re now seeing things return to a more even keel whilst investors wait and see what actually unfolds. In a market so well set up to go higher (easy money, low rates, no inflation) it’s painful to sit on the side-lines and wait something out.

Bloomberg has a comment from Citi, who say that almost all of their clients were looking to ‘buy the dip’ on the stock market fall – which is a worrying sign of complacency. “while there may be some good news on a potential slowing of the outbreak’s spread outside of Hubei province, we are reticent to think that the impact is behind us now” said their chief equity strategist.


In the UK; Reuters run an interesting article about Sajid Javid’s plans as chancellor. His main goal is to double the pace of economic growth, to a level that was last seen in 2006 – pretty much the peak of the last boom cycle. Mr Javid has already talked about opening the chequebook, but an extra £20bn of spending will only increase output by 0.4% and even if you assumed for every £20bn spent you could add the same growth – which you couldn’t – he’d need to spend four times that amount to get where he wants to be  – which would in turn triple the UK’s budget deficit!

Dominic Raab is packing his case and heading for South East Asia this week to go and find us some trade deals. He’ll be in Singapore, Malaysia, Japan and Australia to try and get some quick wins on the list of those we want to work with. Australia is a “natural partner” according to Raab, but at the moment we only take about 3% of their exports and this is mostly wine, gold and precious stones which aren’t the easiest things for us to take more of in return for freer access to export our services to them. That’s not to say that it’s not a valid trip, it’s just a reality check on what might be achievable.

Yesterday the Pound took a hit as the EU announced they could roll back some concessions they made in the Mifid financial regulations for the benefit of the UK. Taking these concessions away would potentially weaken the City’s position as the European hub for financial services. This City AM article is worth a read.

In the US; Trump swerved impeachment and will now be out for revenge on those that crossed him (John Bolton for his willingness to testify, Mitt Romney for crossing party lines and voting for him to be impeached on the first count) There’s an interesting piece from Business Insider on just how much Trump owes to Mitch McConnell for making the process so short and stacked in the President’s favour. Still, he’ll be gunning for four more years now and the Democrats can’t get out of their own way to try and stop him.

Today is fairly data light, but we will get US jobs numbers which will be an indicator of tomorrow’s payrolls data.

Have a great day


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