Summary

Niall covered a range of topics including, the pandemic, volatility in Tech stocks, the US election, China, Europe/Eurozone, Brexit, the Middle East and Latin America. He believed from very early on that the pandemic would not be as severe as that of the influenza pandemic of 1918-1919. Instead, he believes this pandemic is akin to that of the 1957-58 influenza pandemic, one that although is severe in nature, it is not likely to be “big league”. Although Niall believes the pandemic is far from over, pointing to rising cases in Asia spearheaded by India (a story that Niall believes will be very interesting to watch), he does not believe we will see anything like the numbers seen in April, which he attributes to policymaker’s complete failure to protect residents of care homes. He sees this “second wave” as affecting younger people who are more likely to survive the illness relatively unscathed meaning mortality rates should not spike too drastically. Greenmantle specialise in putting current global events within a historical perspective and in this way has notified it’s clients from the start that the mandate to “flatten the curve” was nonsense given that the pandemic would not just be one curve. Given that second waves were present in both the 1918-1919 and 1957-1958 influenza outbreaks, Niall believes the failure of epidemiologists to present these problems to policymakers explains why many parts of the world are now seeing second ripples/waves. Furthermore, Niall pointed to the failure of countries such as the UK and US to implement effective contact tracing and testing leading to a greater reliance on the development of a vaccine and “herd immunity”. Greenmantle believes this vaccine will be available before the next US election. Greenmantle has recently had many clients asking whether we are seeing the dotcom bubble all over again, to which their answer is a resounding no. Niall believes that monetary authorities are being extremely accommodating towards tech stocks meaning that bursting any such bubble will be rather difficult. Niall also sees the future of the Chinese tech stocks as being particularly bright given the investment in China into building network and ecommerce platforms. The key point Greenmantle is making to its clients is that this is a harder election for Trump to win. Firstly, because Biden is more popular in key states than Clinton was and because fourth party candidates are much less important in this election. Secondly, Niall believes that Trump has alienated what was a solid base of support amongst elderly voters. Niall backs this up by pointing to data showing that elderly people have now become far more interested in their personal health than with their financial position, given COVID-19. Furthermore, the data presented by Niall also showed that both the young and elderly demographic believe that Biden would do a better job at handling the economy. Niall also believes the other headache for the Trump campaign will be the stalling of the economic recovery in the US due to the second wave, turning what looked like a V-shaped recovery into a much more of a flat recovery. Although there are many indicators that suggest Trump will struggle to win another term as president, one caveat Niall pointed out is the correlation between gun ownership and republican voting. Furthermore, Niall believes that issues relating to law and order staying at the forefront of the media rather than those surrounding COVID-19 will be key to Trump’s survival. Greenmantle has been arguing that we have been in Cold war II for over a year, pointing to the fact the trade war is an epiphenomenon and that the tech war is the real deal. Niall believes that the US still holds some important cards to play and sees China’s vulnerability to be mainly stemming from its reliance on imported high quality semiconductors. Niall pointed to the V shaped recovery in China being due to a supply side rather than a demand side story. Niall sees this as having a significant effect on not only Chinese fixed assets but also those of the emerging markets. Compared with the US Greenmantle does not believe that there will be such an economic effect from the second wave of COVID-19 across Europe. Furthermore, Niall is encouraged by the EUs mobility data outperforming that of the US. Given this, and the fact the ECB is unlikely to match what the US has done Greenmantle is relatively long Euro versus dollar. Although, Niall does see this as intensifying the effects of likely deflation/stagflation. Niall is despondent with the failure of the UK state to live up to the promises of Brexit. He points to its performance in terms of public health being as bad or worse than that of the US. He also sees the problem for the UK as a clear one, the UK is engaged in brinkmanship with the EU over Brexit from a very weak position. He cites this as a reason that Boris will likely fold to EU demands for a Brexit deal. The big story for Greenmantle in Latin America is that as long as Paulo Guedes remains on board Brazil actually stands to rally. Niall sees the Brazilian economy as relatively sprightly compared to its counterparts. Greenmantle sees the diplomatic relations between Israel, the UAE, Bahrain and conceivably Saudi Arabia having a massive shift in the geopolitics of the region which Trump will never recive teh recognition for. Greenmantle is also not particularly bearish oil currently given that they believe that oil story is more of a demand story than a supply side story given the relative stability of US shale and OPEC plus production.

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