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Stocks around the globe continued to rally in August, as the strong momentum from the lows of March proceeded unabated. It was the fifth straight month of gains for major equity indices, with some key U.S. benchmarks hitting record highs toward the end of the month. There has been a resurgence in COVID-19 cases around the world after lockdown measures were eased, with some regions confirming the arrival of a “second wave”
Major equity indexes ended the month of July higher, despite a surge in COVID-19 cases coinciding with the reopening of economies. Volatility for stocks was high as a slew of quarterly earnings and economic reports were released showing the detrimental impact of the pandemic. Notwithstanding the U.S. economy posting its sharpest contraction on record in the second quarter, investor sentiment remained positive assisted by prominent technology giants reporting better than expected earnings results towards the end of the month.
Investors’ appetite for risk returned in the second quarter as economies around the world started to re-open following COVID-19 lockdowns. Stocks rebounded from their historic declines in Q1 and credit markets had a strong showing, with central banks and governments continuing to provide enormous amounts of stimulus throughout the quarter. Investor optimism, however, was tempered towards the end of the quarter as new coronavirus cases accelerated in the U.S.
Equity markets around the globe had a decent showing across the board in May, continuing the rally from the prior month, as economies around the world gradually started to reopen. A slow but steady decline in new COVID-19 cases, along with progress in the development of coronavirus vaccines, boosted investor confidence and provided optimism around the economic outlook.
Stock markets around the globe were in rally mode during April after the historic drawdown experienced in the previous month. Investors took comfort in the significant stimulus measures introduced by governments and central banks to reduce the damage caused by COVID-19’s impact.
It was an historic quarter and a wild way to start the decade, as the global economy was brought to an abrupt halt due to the COVID-19 pandemic. The virus has drastically changed our daily routines, with self-isolation and social distancing now the everyday norm. Businesses and schools have closed, with many countries around the world on lockdown. The result for equity markets was a free-fall not seen since the global financial crisis of 2008.