The market is coming back to its previous bullish trend, two proves of that:
- Nasdaq is already in neutral territory YTD
- Volatility is around 48%, well below its peaks
- Some companies, specially American technology are regaining ground effectively sooner than expected which is also good news.
The two pillars within this environment that are working are two:
1./ Central bank aid (this was expected to work immediately)
Stimulus from central banks and governments has brought confidence to the market
2./ Covid-19 numbers
Trend of better daily numbers of new cases are consolidating and some businesses are starting to reopen
- Bearing in mind this, the market doesn’t react to an economy, it foresees what the economy will do and act base on that.
Current Context:
March was harmful, April is better with consolidation taking place. Even times are going better than expected with numbers improving faster than expected. Again, Nasdaq has already recovered those YTD loses and this is important because normally it brings the rest of indexes with it. First the DOJ, which represents more classic companies with high dividends, and after Europe.
Then, short term facts are being positive too.
1. Gilead Sciences has reported successful treatment of Covid patients and can be a ray of hope.
2. American attitude, they are focused in reopening the economy and that creates big expectations.
To finish, we´ll have some economic indicators with more government meetings that will still bring more confident to the market and strengthen this faster than expected recovery.
- Nasdaq is already in neutral territory YTD
- Volatility is around 48%, well below its peaks
- Some companies, specially American technology are regaining ground effectively sooner than expected which is also good news.
The two pillars within this environment that are working are two:
1./ Central bank aid (this was expected to work immediately)
Stimulus from central banks and governments has brought confidence to the market
2./ Covid-19 numbers
Trend of better daily numbers of new cases are consolidating and some businesses are starting to reopen
- Bearing in mind this, the market doesn’t react to an economy, it foresees what the economy will do and act base on that.
Current Context:
March was harmful, April is better with consolidation taking place. Even times are going better than expected with numbers improving faster than expected. Again, Nasdaq has already recovered those YTD loses and this is important because normally it brings the rest of indexes with it. First the DOJ, which represents more classic companies with high dividends, and after Europe.
Then, short term facts are being positive too.
1. Gilead Sciences has reported successful treatment of Covid patients and can be a ray of hope.
2. American attitude, they are focused in reopening the economy and that creates big expectations.
To finish, we´ll have some economic indicators with more government meetings that will still bring more confident to the market and strengthen this faster than expected recovery.