Market Report: Economic stimulation vs the curve of Covid-19 pandemic

JOHANNESBURG – Financial markets are comparing the effects of the enormous bail-out stimulation programmes of the developed world, against the “flattening” of the Covid-19 infection and death-rate curves. World equity markets experienced a sharp recovery last week.

Markets, however, have opened weaker due to fears that the start of the US earnings season this week will show the devastating effects of the coronavirus.

The news last week that the US jobless claims had jumped considerably from 210 000 three weeks ago to 17.7 million on Thursday also contributed to some negative sentiment for shares, bonds, and emerging market currencies this week.

US futures also are in the red, although there are signs of a weaker dollar, and bond rates that are starting to move downwards, suggesting that a more risky appetite might prevail in the markets.

On Wall Street, equity markets were stronger on Thursday as the infection curve in the US started to flatten and risky appetite emerged, as US stimulation policies were introduced.