It is increasingly clear that the economic crisis triggered by the pandemic will be much longer than expected. This fact is already hitting American equities.
It is said in the Reuters article.
According to the media, the stock price has been rising for several weeks. This was facilitated by investors’ hopes that colossal financial injections into the economy by the authorities will save the situation. However, even the officials have to admit that there is no need to wait for the economy to recover soon, regardless of whether the quarantine is cancelled now or later. Investors have to take this into account and the stock market starts collapsing again.
Analysts at Deutsche Bank say that equity funds have experienced a three-week outflow of about 30 billion dollars.
Investment strategist Nela Richardson explains what is happening by a lot of uncertainties.
“There is uncertainty in corporate income, there is uncertainty in the economy, and then there is just a behavioral adjustment of consumers”, – she says.
As News Front previously reported, the day before the head of the U.S. Federal Reserve Jerome Powell said that the recovery of the American economy will be long. Moreover, the United States may face a prolonged period of low productivity growth and stagnation in revenue.