Life at this difficult time

20/04/2020 Coronavirus & Market Place

Last week ended on a strong note for global stock markets after a foreshortened Easter period, with most indices enjoying their second back-to-back week of gains. To give some context, stocks peaked in February and fell by 34% in just over a month as the coronavirus spread around the world. However, since hitting their lows on March 20, shares have recovered by around 25%, taking the world index out of bear market territory (a bear market is technically defined as a fall of 20%). Why has this happened, given that the news flow, particularly economic, seems to get worse by the day?

The current crisis is a medical one which has subsequently become an economic one. The answer to when the world can get back to some semblance of normality is entirely dependent on how quickly the medical crisis improves. Here, the news is better, with infection rates slowing down in many countries and governments beginning to look at easing some of the conditions of the lockdowns that are currently in place. At the same time, progress is being made on testing and treatment, while there are many institutions working on preparing a vaccine. Every country is at a different stage of dealing with the pandemic, but markets are looking more positively at data which suggests a general plateauing of the disease.

What remains uncertain, however, is how quickly individuals and businesses will be able to function as usual when the crisis is over. The road to recovery will undoubtedly take time and support from governments will be needed long after the medical crisis has subdued. However, that is for the future. Let the world get back to health first.

Keep Safe and well.