All things market related
COVID-19 has caused a massive stir in every day life. People aren’t allowed to see their family and friends, go to work unless it is an essential service, or undertake in many of the activities they used to do before lockdowns were put into place. Postal services are working harder than they’ve ever had to due to everyone shopping online to get their retail therapy. Children and parents are working and learning from home, making both more difficult than imagined.
Despite all of this change and these strict social distancing rules, it’s worked to Australia’s advantage. Our daily update of new cases has significantly dropped, and our mortality rate is barely existent.
This drastic improvement has led to the first stages of lowering restrictions, with more people allowed to visit your home, school and childcare to resume in the coming weeks and certain businesses opening again.
We’re on the path back to normality, but what will ‘normal’ look like when it appears? For more information on restrictions in your state, see this article.
More information on Coronavirus
Below is a list of some links that will be helpful when staying up to date on all that’s happening through this global pandemic:
Global markets rose on Friday despite mounting economic damage from the coronavirus pandemic, as tensions eased between the White House and Beijing.
Share prices on Wall Street and in Europe ended the week on a high amid rising hopes that lockdown measures could be lifted soon to reboot growth and that a full-blown global trade war could be averted. With stock markets closed in the UK for the early May bank holiday, the Dow Jones Industrial Average was up 380 points, or 1.6%. European markets also rallied, with Germany’s Dax index and France’s Cac up by more than 1%.
Amid concerns that Donald Trump would use the coronavirus pandemic to escalate the trade dispute between Washington and Beijing in retaliation for China’s handling of the pandemic, analysts said civil contact between the US and China may signal a cooling of tensions between the two sides.
Morgan Stanley: The Global Investment Committee’s Outlook
The dual shocks of coronavirus and the collapse in oil prices are likely to push the global economy into recession over the next 1-2 quarters, ending the 11-year business cycle. However, the swift and furious bear market sell-off since the S&P 500 all-time high on February 19 leaves most asset classes already fully discounting that outcome. Furthermore, we are anticipating an increasingly coordinated “do whatever it takes” stance from global policymakers who are likely to deliver both monetary and fiscal stimulus that should stabilize things as we navigate the human disruption and health-related parts of the crisis. On the other side of the recession, we see potential for a global recovery. Green shoots were already visible outside the US, and inside the US, the foundational health of the consumer has never been stronger to weather a recession, i.e., low unemployment, strong balance sheets and housing market with momentum. Consequently, in recent weeks the GIC has reduced exposures to long-duration Treasuries and began rebuilding exposure to US large-cap growth, US small/mid-cap stocks, US credit and commodities. While we believe the current equity market correction constitutes a cyclical bear market within a longer-term equity bull market, the GIC believes a new multi-year bear market in fixed income has begun. The next leg of the secular bull market in equities is unlikely to see the same leaders as the past decade-namely Technology and Consumer Discretionary stocks. Instead, the GIC sees Financials, Industrials and Health Care stocks likely to outperform. Volatility over the next few quarters should be exploited frequently to rebalance portfolios to strategic asset allocations.
Market data provided by Bloomberg.