Buoyant stock markets are not necessarily ignoring alarming economic data, rather they are reflecting the post-pandemic era, affirms the CEO of one of the world’s largest independent financial advisory organisations.
The observation from deVere Group chief executive and founder Nigel Green comes as official figures on Friday revealed that more than 20 million people in the U.S. lost their jobs in April and the unemployment rate more than trebled.
Mr Green comments: “The staggering U.S. unemployment numbers wipe out a decade’s worth of job gains. There’s been nothing like this since the Great Depression.
“Yet U.S. stock futures climbed higher as global markets rose on Friday. This is highly unusual.”
He continues: “There are two things happening simultaneously here.
“First, a weak first half of 2020 has already been priced-in.
“As have the risks of a potential second wave – but the concerns of this are being largely contained as it is not such a ‘bolt out of the blue’.
“It is extreme uncertainty, the likes of which we saw at the peak of the pandemic, that typically upsets markets.
“Whether they are correct in their assessment remains to be seen, but markets are looking towards the second half of the year. They appear to believe that there is likely to be a steady economic recovery as key advances are made in coronavirus treatments, as central banks continue to implement and further bolster historic stimulus packages, and as lockdown restrictions around the world are eased to revive activity.”