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Sixth Weekly Commentary: COVID-19 Response

April 24th, 2020

Weekly Commentary

Another “End of the Beginning”


Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

Sir Winston Churchill, 1942

After a year of military setbacks and the devastating, nightly bombing of London, British troops had routed Hitler’s forces in Europe and Churchill could finally offer his countrymen the slightest ray of optimistic hope.

Churchill’s quote rings loud and clear today.

For we too may have seen the worst of the pandemic: the overwhelming onset, the awful illness, the daily devastating loss of life, and the wrenching shutdown of the global economy. Just weeks after the initial shock, communities have voluntarily come together, contagion curves have been flattened and medical professionals around the world are already racing to test treatments and discover vaccines.  And, in less than four weeks, stimulus measures amounting to roughly 35% of U.S. GDP have been mobilized to counter the stunning economic impact of the crisis.

While we may indeed be at the end of the beginning, great difficulties certainly lay ahead.  But, just as Churchill saw the outlines of a turning point, we are seeing some signs of stabilization. U.S. equities are 25% off the lows and high yield spreads have compressed 340 bps from the highs. Billions of dollars will be raised to invest in opportunities created by the shock.  HCG’s portfolio – a barometer of the real economy – sees the same.

The Churchill quote at the outset of this piece is notable for its candid assessment of an awful situation. He was never one to sugarcoat a problem, and it was that commitment to honesty and candor that won him the almost complete confidence of the UK’s citizens and buoyed their morale during the darkest days of war.  We aspire to that same level of transparency in our partnership with you.

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