Global Stock Markets to Rise Higher and Not Repeat March’s Lows
Arslan Butt • 1 min read
Economists polled by Reuters indicate that 2020 could be one of the worst years for global stock markets in at least 10 years. However, they remain slightly optimistic that stocks may not revisit the steep lows seen in March again this year.
The global economy is expected to experience a significant recession this year on account of the coronavirus pandemic and economists agree that economic recovery could take much longer than previously anticipated. While most economists forecast a swift, V-shaped recovery when the pandemic initially began, many now feel that recovery could be a more prolonged process.
Despite the forecasts for a global economic recession, however, equity markets around the world have seen some form of rally over the past couple of months, buoyed by the various stimulus measures rolled out by governments and central banks. In addition, traders in stock markets still hold on to the hope that economic recovery will be swift and sharp as countries lift lockdown restrictions and get back to work.
With economies and businesses set to reopen, economists expect 11 of 17 indexes to rally higher until the end of 2020. Additionally, almost 70% of economists feel that March’s lows will not be repeated by global equities.
However, significant risks are still in play, including the possibility of a second wave of coronavirus cases as economies reopen. There is also extreme uncertainty about companies’ earnings and how long they will take to recover to pre-pandemic levels.