The markets in the second half of 2020

Published on: 02-Jul-2020
Category: Trading
Last updated: 02-Jul-2020

The markets in the second half of 2020

The direction of the stock markets is currently difficult to predict. After the worst recession in 90 years, the financial markets appear to be solid again and supposedly leave the crisis behind. Just a few months ago, the US leading Dow Jones index fell 40 percent within a month and money could be asked to buy a barrel of oil. All the violent reactions and effects of the Corona crisis seem long ago. A new record high was even reached on the Nasdaq tech exchange.

The rapid recovery phase is supported by the states and central banks. Billion-dollar bond purchases and economic stimulus caused partly euphoric mood on the stock exchanges, which was far from the real economy. The stock markets looked far into the future and hoped for a quick recovery. However, it is questionable to what extent the prices will continue to rise even when the crisis is actually and finally over.

While one speaks of a V-shaped recovery on the stock market based on the prices, market analysts and experts tend to see a U-shaped course of the crisis. Accordingly, investors expect the economy to recover soon after the rapid economic downturn. The U-shaped course assumes a stabilization or stagnation after the price slump and assumes a later price increase. The development of the crisis is currently largely dependent on an uncertain second wave of viral infections.

But it is not only the corona virus that affects the markets in the second half of the year. However, the focus remains on the United States. In connection with the presidential election in November, the focus will again be on the relationship between the United States and China, but also on the reactions of the democratic candidate Joe Biden. Experts do not expect the trade war in the world's two largest economies to escalate again. But Donald Trump can use the old conflict again in his election campaign to create mood. On Wall Street, Trump is more preferred as an economically minded president who has initiated tax reforms than moderate Biden.


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