The ebb and flow of sentiment is critical in the short term.  The markets will overreact to both good news and bad.  The problem is that data is going to be less reliable than it has ever been and that is the fuel that feeds sentiment.  The extrapolation of data points amplifies the overreaction and a virtuous cycle quickly becomes a vicious one.

News of ‘lowest number of cases’ that permeates headlines can quickly change to a much darker narrative.  Yesterday, the number of new infections in Germany rose to a three-week high and Italy announced that it was keeping schools closed until September.  Hong Kong has extended its lockdowns until the end of April and expectations for a similar extension here in the UK are high.

However, we do know that for every piece of bad news, policy makers are looking to quell with announcements of new stimuli.  Last night our Chancellor, Rishi Sunak, pledged £750 million of extra funding for our struggling charities and Congress in the US confirmed an additional $1 trillion stimulus package was currently being drawn up.

This is a reminder that temptation to gorge on the 24-hour news flow can lead to a rollercoaster of emotions; we wrote in our quarterly review in January of the perils of relying on particular media sources.  We strive to provide balanced and relevant commentary, which we hope will become your mainstay in these difficult times.