Hedge-Fund Strategist Waits for Quarantine Panic as Buy Signal
Spasms of volatility continued to shake financial markets this week as the novel coronavirus spread in the U.S. and Europe.
(Bloomberg) --
Spasms of volatility continued to shake financial markets this week as the novel coronavirus spread in the U.S. and Europe. When will it all end and when will it be safe to buy this epic dip in the stock market? No one knows for sure. However, Naufal Sanaullah, chief macro strategist at hedge fund EIA All Weather Alpha Partners, joins the “What Goes Up” podcast this week to discuss what he’s looking for as a signal the tide is turning.
Some highlights of the conversation:
“How long are we going to have social isolation procedures, if we get them? If we get them, that’s the biggest risk to earnings growth and potential for jobs losses. And then the question becomes: $8 billion is not going to move the needle. We need to add another zero to that. If you look at like 9/11, Hurricane Katrina, Hurricane Sandy, you know, 50 to 100 billion-dollar packages. We’re nowhere near that level right now. If we see the White House and Congress suddenly catch up, perhaps the low is in. But based on the fact that President Trump called it the ‘corona flu’ Wednesday night, we do expect there is some risk for potential more downside, potentially new lows. Once we get to the point where we’re starting to see, kind of a little panic about the effect of potential social isolation procedures, then we start bargain hunting.”
Also joining the show is Bloomberg reporter Luke Kawa, who discusses how volatility markets are handling the turbulence.
To contact the editor responsible for this story: Topher Forhecz at tforhecz@bloomberg.net
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