INVESTMENTS | 5 MIN READ

Where Are Markets Likely To Go?

Written by Sally Dempsey
where are markets likely to go

At the end of February, the global economy was strong, and we were expecting a good year for investments. Out of nowhere, COVID-19 changed all that.

At the end of March Shares around the world tumbled, with the UK’s own FTSE share index losing one third of its value, pre COVID. Since that point, however, markets have been slowly rising once again.

Where are markets likely to go?

Just as COVID-19 created the share fall, solving the COVID-19 problem will cause markets to rise.

The virus now appears to be under control in Europe and the US, apart from the southern states of America.

The US is stalling but with recent increases in the effectiveness of treatments, and the move to online spending, this is less of an economic impact than a health impact.

Economies around the world are slowly opening although measures such as face masks make the position far from normal.

Vaccine news is positive

  • Moderna’s vaccine trial of 45 patients has created antibodies and they are moving to a 30,000-person trial in July.
  • Oxford and Cambridge are entering large scale testing
  • Professor Robin Shattock of Imperial College, London stated they were on track for a vaccine for early next year and were building production capacity to vaccinate the whole of the UK by the middle of next year. He is also of the opinion that with so many initiatives around the world to achieve a vaccine there is only a “very slim chance” that a vaccine will not be found.

China are in front of us in terms of the virus

China is controlling infections, although the validity of data from China is always questioned.

Reports from personnel in China confirm that China is back to normal in terms of production and is effectively managing any outbreaks, such as the recent Beijing outbreak, by an aggressive track and tracing system.

Only cinema, concerts and large sporting events are still in lockdown. Other countries in the region are not fairing as well – Japan – due to a lack of track and tracing system and India due to the high population density in Delhi and Bangalore.

What can we expect in the coming months?

The Governments will get better in managing outbreaks allowing economies to open and remain almost fully open. Governments and Health systems in the developed world are more prepared and will better manage any second wave. If this does materialise to any extent,we can expect focused lock-downs.

Unfortunately there will be more negative economic news (job losses, company closures etc.) and the effectiveness of government Furlough schemes etc. will become known.

Gradually as the fear of the virus subsides, we are expecting staggered growth in the markets with an expectation that any COVID investment losses will be recovered by the end of the year and the year may even be positive. 

If you wish to discuss any of the above, please book a video call.

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