Global markets fell on Wednesday ending a five day rally. However, markets rallied again this morning. Every day brings good news and bad news. Every day the markets react differently.
The bad news this week included the US economic data which showed the impact of the virus on their economy with over 22 million now officially unemployed. Trump also made a very rash decision to cut off funding to the WHO, leading to further concerns about his decision making. The IMF gave a stark warning that global economies could suffer the worse blow since the 1930s. All very dismal news.
There were some nuggets of positivity. Death tolls in Spain and Italy have eased. Some countries have started to ease restrictions in order to help their economies to start recovering. Irish property companies have rebounded slightly on the news that construction will be one of the first sectors to recommence once restrictions ease. Ireland and the UK recommenced Brexit talks. Fianna Fail and Fine Gael are looking to make history by entering a coalition and stabilising this government.
So, while we have seen slight recoveries and there are glimmers of hope, we still do not feel that the markets have hit the bottom yet. Recovery, when it does happen, is expected to be initially sharp and then gradual as consumers cautiously return to spending. As we have said before this is about ‘time in the markets and not timing the markets.
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