The equity and bond markets are set to register a large positive weekly return. The positive momentum comes on the heels of numerous governmental actions. These coordinated domestic and international actions have given reason to bolstered investor confidence. The “uncertainty” fog hanging over the financial market still lingers, but it may be dissipating.
The Federal Reserve (the Fed) was quick to provide many rounds of monetary stimulus and support programs – including two massive rate reductions and different rounds of cash infusion into the economy. The efforts have totaled over $1 Trillion dollars.
After some grandstanding, Congress put forth a $2 Trillion bipartisan bill. The Congressional bill is designed to financially support individuals and business due to the near U.S. economic closure. To put the stimulus bill into perspective, the financial support is double what was sanctioned during the ’08-’09 Credit Crisis. This is an indication of the seriousness and commitment to avoid the earlier harsh lessons of the Credit Crisis aftermath, known as the Great Recession (not to be confused with the 1930’s Great Depression).
International counterparts have followed suit. Central banks around the world have infused their financial markets and institutions with copious amount of liquidity while governments have stroked fiscal stimulus bills.
Significantly coordinated efforts have been put forth to battle COVID-19. Determined governmental experts are constantly pouring over COVID-19 data, relaxing red tape and entertaining “outside the box” thinking. Private entities are fully engaged in the fight. For example, pharmaceutical companies are exploring treatment and vaccine options while automotive manufacturers are redeploying facilities to build ventilators.
Please don’t mistake the above comments to suggest we are rid of COVID-19 and its repercussions. However, the world is clearly engaged and unified in the search for a solution to the virus and all its logistical nightmares. After this virus is contained, the world, and opportunities for investors, will be stronger than ever.
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