Due to the global spreading of the Covid-19, fears for economic activity increase.
The data released this month will provide a first assessment of the damages. The Fed has already cut rate and Central banks will follow also providing liquidity support. Fiscal measures look forthcoming.
Markets are discounting a lot of bad news and might be prone for are bound once global infections start to recede. But a global pandemics can no longer be ruled out.
Given the high uncertainty about further contagion and the economic fallout, we scale back the already cautious pro-risk bias in our portfolios,reducing our tactical equity exposure to neutral.