The fiscal and monetary stimulus packages implemented by governments and central banks globally have helped markets rebound fairly strongly over the month of April. Central bank interventions and massive asset purchase programs, including high yield bonds and direct lending to companies, helped restore liquidity in the global financial system.
COVID-19 has continued to spread rapidly around the world and was declared a global pandemic by the World Health Organisation. This has caused a severe shock to the global economy and financial markets have responded with sharp drops in share prices, a rise in credit spreads and a flight to defensive assets over March.
Coronavirus fears drove losses across equity markets and sparked a flight to defensive assets over February. Global equity markets reached fresh highs in mid February, then sold off sharply alongside other risky assets shortly thereafter. The sell-off in markets stem from investor concerns regarding the spread of COVID-19, with an acceleration in reported cases outside mainland China, specifically in Italy, Iran and South Korea and the ramifications on global economic growth.
Market fluctuations often occur and short-term uncertainty is common. Over the long term, investment portfolios that are sensibly put together seek to deliver on long-term objectives.
Share markets fell last week with the Australian market experiencing one of its worst weeks since August 2011 (when people thought the EU would break up). Negative returns in any given period can happen in the share market with this week standing out for its severity. However, we also see historically shares have lost value in approximately 22 weeks out every 52 weeks since 1980. It is not a rare thing to see in the share market.
Global shares closed out the month with losses after reaching fresh highs in mid January 2020. Market sentiment has deteriorated since the coronavirus outbreak in mid January and its potential impacts. Emerging Markets suffered, specifically Latin America and China lagged in anticipation of economic growth fallout. Whilst UK and Japanese share markets fell, US shares…
Global equity markets staged a strong finish to 2019, with investors favouring riskier assets amidst declining trade war concerns and easing geopolitical tensions. US equities posted solid returns over December, as Hedged Overseas Developed Shares increased by 2.3%.
Equity markets extended their rally in November with major indices reaching new highs. Markets were encouraged by reported progress on trade negotiations between the US and China, coupled with stable economic readings in the US and initial signs that growth deterioration in Europe may have bottomed.