Financial Markets VS COVID-19: Is We At The Bottom Again?
Today, trends in the global financial market largely determined by the dynamics of the distribution of COVID-19. How did the reduction in coronavirus deaths affect key US stock indices? Let’s get it together
What factors influence current stock market indicators?
First of all, financial markets suffer from an economic blockade, because businesses suspended, many enterprises forced to put a barn lock on their doors and declare bankruptcy. Today we see a positive trend in the dynamics of the spread of the pandemic. In June, in particular, the number of deaths due to coronavirus decreased, although the level of new infections and hospitalization of citizens increased.
Financial experts are convinced that this trend will serve as an impetus for the removal of some of the economic restrictions both in the USA and in other countries. Although it is too early to talk about a confident victory over the coronavirus, shortly we can count on the growth of business and consumer activity.
The stock market has already responded to changes in the United States, which is associated with a reduction in the number of deaths. As a result, key stock indexes rose by more than 1% on June 29.
Now the whole world is watching the situation in China because the country was able to return to the previous regime of economic life as soon as possible. In China, measures have been introduced to restore the services sector, which is mired in losses during the peak of the spread of coronavirus. Today, the index of business activity in China has grown to 54.4.
China’s economic recovery model is a good example of the United States. But the situation in America remains tense. It will be possible to talk about the restoration of the services sector after publishing information on the current level of employment in the United States. Also, financial experts continue to predict the onset of inflation and a deep economic crisis shortly, as a result of the release of “helicopter money”. These forecasts compounded by the dissemination of information about the possible onset of the second phase of Covid-19 in the world.
Is the stock market going to the bottom again?
Today, the S&P 500 is still in the range of the 200-day moving average. If this indicator has impulses for growth, financial markets may avoid a repeat of the March collapse due to fears of the second wave of COVID-19. Nevertheless, experts agree that warming in the financial markets is possible only after confidently overcoming the negative consequences of the spread of coronavirus for the business and social sectors.