After the trillions the FED threw on the table and the many others it vowed to join if necessary, investors were excited yesterday about the possibility of a package of economic support in the order of $2 trillion, which should include some “helicopter money”, i.e. checks directed to citizens to help overcome the negative financial consequences of measures implemented to contain and mitigate the coronavirus epidemic, while buying time for the companies are not left without a substantial part of their customers, which would be absolutely disastrous for the economy in the short, medium and even long term. Since a good part of the productive fabric is at risk of closing doors, be it in the manufacturing sector or in the services.
Photo by Louis Velazquez.
We will see how and when the novel of the agreement will end, reached for now in principle by both parties, but beyond that and as I have been referring the only “certainty” in this phase is high volatility and as always in these cases it is advisable caution with positions, namely with leverage. We are talking about pulling to either side in the order of 1% to 2% in a very short time, sometimes you can’t even make a coffee and the market has already “flown”. It is also necessary to take into account that for the time being the agreement reached by politicians in the USA is still not “law”, it remains to pass in the White House, which however should not be an obstacle, however pragmatism, the impact of this pandemic on citizens, companies and the economy is still beginning to make itself felt so that tranquillity in feeling is still a mirage.
