Alger Breaking Views: Will Economic Recovery Mirror the “Epi” Curve?
We've said for some time, the key to a market recovery doesn’t lie in monetary or fiscal stimulus, but in investors’ ability to have confidence in the future.  In this brief video, Alger Director of Market Strategy Brad Neuman discusses that as more global governments take action to flatten the current epidemiological curve, investors are likely to regain confidence in the markets. ​​​ ​


  We’ve said for some time now the key to a market recovery doesn’t lie in monetary stimulus or fiscal stimulus, though those things are clearly helpful.  But it relies on people’s and investors’ ability to be able to have confidence in the future.  To be able to think about fundamentals and what companies will be able to earn in the coming 12 or 24 months.  And we think investors are only going to get that kind of comfort with the slowing transmission in the disease globally.  So, we’re looking at these country curves very carefully.  Because we know two things about transmission curves from infectious diseases.  Number one, they don’t exponentially increase forever.  In fact, they typically follow what scientists call an epidemiological curve or “epi” curve, for short.  They increase very rapidly, growing exponentially for some time, until there’s enough immunity built up in the population, where that transmission rate peaks and then begins to fall rapidly.  We see this in many different diseases.  Secondly, we know that that curve can be altered.  And there’s an old saying in financial markets.  Investors stop panicking when governments start.  And so, when governments around the world take this disease as seriously as it can be taken, we’re confident that the curve will begin to be bent.  And as we’ve seen in countries in the east, and maybe beginning to see in countries in the west, the curve and the transmission will slow, and investors will regain confidence and be able to look forward to earnings in 2021 and beyond​.

Source: World Health Organization, Johns Hopkins, and Alger Analysis

​The views expressed are the views of Fred Alger Management, LLC (“FAM”) and Alger Management Ltd. (together with their affiliated entities “Alger”) as of March 2020. Alger has used sources of information which it believes to be reliable; however, this publication is not intended to be and does not constitute investment advice. These views are subject to change at any time and may not represent the views of all portfolio management teams. These views should not be interpreted as a guarantee of the future performance of the markets, any security, or any funds managed by Alger. This material is provided for informational purposes only and should not be considered healthcare advice.  Please consult your healthcare professional for medical advice.

Risk Disclosures: Investing in the stock market involves certain risks and may not be suitable for all investors. Growth stocks tend to be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Past performance is not indicative of future performance. Investors whose reference currency differs from that in which the underlying assets are invested may be subject to exchange rate movements that alter the value of their investments.  

Important Information for US Investors:
This material must be accompanied by the most recent fund fact sheet(s) if used in connection with the sale of mutual fund shares. Fred Alger & Company, LLC serves as distributor of the Alger mutual funds.

Important Information for UK and EU Investors:
This material is directed at investment professionals and qualified investors (as defined by MiFID/FCA regulations). It is for information purposes only and has been prepared and is made available for the benefit investors. This material does not constitute an offer or solicitation to any person in any jurisdiction in which it is not authorised or permitted, or to anyone who would be an unlawful recipient, and is only intended for use by original recipients and addressees. The original recipient is solely responsible for any actions in further distributing this material and should be satisfied in doing so that there is no breach of local legislation or regulation.

Certain products may be subject to restrictions with regard to certain persons or in certain countries under national regulations applicable to such persons or countries. 

Alger Management, Ltd. (company house number 8634056, domiciled at 78 Brook Street, London W1K 5EF, UK) is authorised and regulated by the Financial Conduct Authority, for the distribution of regulated financial products and services. FAM and/or Weatherbie Capital, LLC, U.S. registered investment advisors, serve as sub-portfolio manager to financial products distributed by Alger Management, Ltd.

Alger Group Holdings, LLC (parent company of FAM) and Fred Alger & Company, LLC are not an authorized persons for the purposes of the Financial Services and Markets Act 2000 of the United Kingdom (“FSMA”) and this material has not been approved by an authorized person for the purposes of Section 21(2)(b) of the FSMA.