These are not happy times for investors who invest in equities. The rate of the S&P 500 is at its historic low, with a decrease of 22.6% this year. Although it increased y 2% the past 3 days and it can be taken as a very big improvement from the downfall that it was experiencing.
It may look like markets are getting stabilized day by day, but the stock market runs on assumptions, and all it takes is some bad news about the health and the economy, the chips will fall. Is there anything positive about the decreasing death toll and the COVID-19? Let’s see what the specialists say.
Nicholas Atkeson’s views
According to the scenario, COVID 19 treats everyone equally. Even if you are healthy and strong enough, you would still require intensive health care and would need ventilation.
In the early days, we weren’t ready who will need intensive care the most because it was believed that most people will more likely recover at home as they did show minor symptoms.
Just like this, the stock market is suffering from a series of setbacks. The feds and the congress are rubbing their heads together in order to keep the market steady. Congress just passed the CARES Act, and FED helped them in cutting the funds rates to zero and made other financial adjustments to liquidate the money to inject in the markets.
Although the credit markets are still open at the center of the storm, one can see Yum Brands surviving the outbreak. The company owns Pizza hut, KFC, and Taco Bell. The company, due to the current conditions, sold more than $600 million worth of bonds.
Andrew Houghton ‘s thoughts
Andrew viewed the situation as volatile and said that one can never know what the day will bring. So there is no clarity on how the market is going to play in the next few months. On a positive note, the infection rates and the death toll is constantly on the demise in the US. It is quite clear that we will soon be able to check if we carry the virus while staying at home.
On the negative note, the economy is falling down, unemployment is on the rise, and the market is depressed. The energy sector is trying to survive a low hot as there is a collapse in demand and the ongoing war of oil prices.
There is only one way that the oil prices could be stabilized, and that is when the major oil-producing countries stop producing the oil. This would play a constructive role in maintaining stock prices.