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The deadly ongoing pandemic persists with no credible projections leaving banks divided on markets with advice ranging from buying on the current dip to an outright downgrade of the asset class.

Earlier this week, global equities and oil plunged to record all-time single-day drops as investors grapple with the widening worldwide effects of the coronavirus pandemic and an OPEC meeting that failed to inspire calm in commodity markets. Safe haven assets soared with the U.S. 10-year Treasury posting a historic-low of under 0.5 percent at one point and markets are now pricing a Fed funding rate cut of 100 basis points by year-end. 

While risk assets were uniformly rattled, the outlooks from banks were perhaps more divided after the correction. From buying on dips, wait-and-see approaches to outright downgrades, here are banks’ equity views:

Buy Now

At UBS, the correction has inspired optimism to buy on the current dip with a preference for emerging markets despite potentially greater challenges when tackling the crisis. The bank emphasized that the outbreak would not derail secular trends including the ageing population and developments in healthtech alongside recent progress in genetic therapies. In fact, the crisis may even accelerate other trends in connectivity and localization, benefiting companies exposed to the ongoing next generation industrial revolution and digital transformation.

BNP Paribas Wealth Management echoed the positive views on the structural tailwinds for internet-driven consumption. It reiterated confidence that its recommended basket of Chinese tech stocks would outperform the broader market in addition to supportive short-term stimulus.

Downgrade

Pictet was amongst the most bearish of banks as it outright downgraded the asset class from a neutral to an underweight rating. The pure play said it would refrain from «taking a buying opportunity until the risk of a global recession can be ruled out», adding that it was actively de-risking portfolios and adding protection.

In emerging markets, it also held an underweight rating underlining the potential for a second-round effect from coronavirus containment measures on supply chains and corporate earnings.