These are not happy times for investors who invest in stocks. The rate of the S&P 500 is at its historic low, with a decrease of 22.6% this year. It may look like markets are getting stabilized day by day, but the stock market runs on assumptions. All it takes is some bad news on health and the economy, and the chips will fall.
Is there anything positive about the decreasing death toll and the COVID-19? Let’s see what the specialists have to say.
Nicholas Atkeson’s views
If we look at the situation, COVID-19 treats everyone equally. Even if you are healthy and strong enough, you would still require intensive health care and would need ventilation if you ever catch it.
In the earlier days, we weren’t prepared when it comes to knowing who will need intensive care the most because it was believed that most people would more likely recover at home if they only showed 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. They also made other financial adjustments to liquidate the money injected into 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. He said that one could never know what the day will bring, and there is no clarity on how the market is going to play in the next few months. Also, the infection rates and the death toll are continually rising in the US. On a positive note, it is quite clear that we will soon be able to check if we carry the virus while staying at home.
Unfortunately, the economy is falling, unemployment is on the rise, and the market is depressed. The energy sector is trying to survive low steam due to the 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 oil. This would play a constructive role in maintaining stock prices.