The past week has been a good one for equity markets, responding to slowing new COVID-19 cases in hotpots like Italy, Spain, and potentially New York. Here in New Zealand it appears the lockdown is working – fingers are crossed that measures may be eased sooner rather than later.
While positive news is welcomed, the outlook for both the virus, and the resulting economic impacts, remains highly uncertain. In the near-term we expect news around the virus itself will drive markets — you only have to look at the past two months to appreciate news-flow and sentiment can swing quickly. Longer-term, the damage COVID-19 has wrought on people and economies will have ramifications for investment markets for years to come.