According to yesterday published data the world trade dynamics declined by 2.1 % y/y in January which is the biggest decline since the global financial crisis 11 years ago. Therefore international trade began to significantly decline even before the worldwide outbreak of the coronavirus pandemic.
What are the implications? World trade will record even more massive slide in February, March and following months which will have negative impact on revenues, profits an cash flow of big international publicly quoted corporations. Stock markets rout from the last several weeks has reflected this fact very well. I believe that world trade dynamics will begin to significantly improve only in the moment when major world economies get COVID19 pandemic under control which will hopefully take place at some point during the third quarter.
Michal Stupavský
Investment Strategist Conseq Investment Management, a.s.