The consensus appears to be that the market panic is over. That seems pretty obviously true. It doesn’t mean there won’t be another panic in the future, but that downward spasm of fear has passed for now. The question is: what happens next? Does this get worse before it gets better? Or are markets already looking forward to a bright future in 2021? The bull case for investors right now is that the rapid actions taken by central banks and governments have managed to forestall the worst of the coronavirus pandemic. The financial system is underwritten. The economy will freeze but then rebound. And the virus itself will peak, the economy will reopen relatively quickly, and there won’t be a second or third wave that means we have to shut down again. Oh, and there won’t be any big geopolitical fallings out (which for me is the ultimate wildcard here).

On the bull side, I can’t comment on the pandemic statistics because I don’t know any more than you do, and in fact I probably don’t keep as close an eye on that data as many of you. (Watching the daily death rate seems unhelpful when I have no real context to put it in.) But cases do seem to be easing off in both the hardest hit parts of Europe and even in parts of the US. So optimism might be the right approach – who knows? As for geopolitics, that’s a story for another day. I do struggle to see a world in which this makes China-US relationships better rather than worse. And the tensions over the oil market also suggest that nations are jockeying for power in a way that simply doesn’t happen when one is blatantly dominant. We’ll park that to talk about some other time. Money can definitely help On the narrower things that markets tend to focus on, there is no question that some of the measures announced by central banks and governments to support the global economy through the coronavirus pandemic are working. Here’s a good example with a great statistic for you: towards the end of last month, the Federal Reserve, America’s central bank, said that it would start buying investment grade corporate debt in secondary markets for the first time. You know what happened after that? The final week of March saw 49 investment grade companies issue $107bn worth of corporate bonds. As Howard Marks of Oaktree Capital points out, that was the single largest week for investment grade corporate bond issuance on record (it’s worth reading his whole memo by the way).

That’s quite an extraordinary statistic, particularly when you consider that companies weren’t exactly short of debt in the first place. You also have to imagine that ratings agencies are now under pressure to be wary of creating “fallen angels” – companies that fall from being investment grade to junk. A raft of such downgrades was viewed as the potential trigger for a catastrophic sell-off in the bond market. Now? I don’t think that’s going to be as much of an issue. That shows you the difference the Fed can make. Money can get through to companies when it’s on offer. The problem – as ever – is that the bigger you are, the closer you are to the money. If you are a big company, you can now effectively borrow money direct from the Fed, which is probably the single most lenient lender in the entire world (because in reality, it has no capital at risk, because it can always print more if it needs to). But if you are a smaller company, you still have to borrow money from the usual places – typically the bank. The bank isn’t like the Fed. Banks, at least in theory, still have to be picky about where they lend their money. And despite the full-throated encouragement of the authorities to be free and easy about it, old habits die hard. Do you want to lend money to a restaurant business when every potential customer is shut indoors? Didn’t think so. That’s going to put more pressure on governments across the world to help. If we genuinely hope to rebound from this, then governments need to act faster and more directly to help. The Swiss system appears to be the model – businesses can get a crisis loan of up to 10% of their annual revenue (to a maximum of half a million Swiss francs).