Market update 23 March: Market pressure continues

• This morning the Oslo Stock exchange is 4% lower, in line with European exchanges.
• The oil price is down 62% year-to-date, hitting its lowest price since 2003. This is partly the reason for the NOK collapse, which is at a record low against the USD.
• The downward pressure on NOK has continued despite the Norwegian Central Bank announcement that it will intervene in the market and buy NOK when they see its needed.
• In the US, Democrats and Republicans have failed to reach agreement on how to distribute the funds in an expanded stimulus package. They agreed to double the amount launched last week, to USD 2 trillion, 10 percent of GDP. Large US companies have, on average, funds for 7 months of operation, so they should make it through the crisis. This is not necessarily the case for smaller companies. The disagreement in the US Congress now centres on how to ensure that support goes to those who need it.
• The consensus view is that we are entering a global recession with a base scenario that it will be deep (but short) and that volatility and uncertainty will continue until we see a positive trend in the number of coronavirus deaths. Viable businesses will survive, but not all.
• The fall in activity in China in February was the biggest since the cultural revolution, while in Norway unemployment jumped from 2.3 to 5.3 percent in one week. The US Treasury Secretary Steven Mnuchin forecasts unemployment to increase 20 percent in the US if no further measures.

SKAGEN Funds Summary

• No material changes.