ET NOW, Released on 7/14/20

Most of us expected equity markets to retest the March lows, but markets have defied that rationale. Markets are drawing support from extraordinary injections of liquidity from the Central Bank but the markets were overvalued prior to the outbreak of the pandemic, so correction from higher levels has been seen. In the USA, equity markets have gone up sharply, bond yields have moved to unprecedented levels. Our domestic savings rate will go from bad to low, will move into negative territory. Believe that the dollar can correct by as much as 35% on a broad trade-weighted basis over the course of this & next year. Markets not taking any rumors of lockdown very seriously, says Stephen Roach. Listen in!

Stephen S. Roach, former Chairman of Morgan Stanley Asia and the firm’s chief economist, is a senior fellow at Yale University’s Jackson Institute of Global Affairs and a senior lecturer at Yale’s School of Management. He the author, most recently, of Unbalanced: The Codependency of America and China and Stephen Roach on the Next Asia: Opportunities and Challenges for a New Globalization.

  coronavirus, economy, markets, pandemic, stocks