The end of the year is quickly approaching and investors and traders the world over are wondering what lies ahead for equities. The economy and market have been resilient despite the coronavirus pandemic and there’s a lot of hope that the markets will continue to turn around.
The beginning of the year saw a sharp decline in stock markets as fear and economic uncertainty caused them to dip significantly. However, as the months went by, the markets recovered steadily and many hit all-time highs during the summer. It appears that the markets have weathered the storm and are back on track to pre-pandemic numbers.
Now, the question is, what will the rest of 2020 bring?
Analysts believe that the market will continue to be volatile, but the outlook is overall positive. There’s a lot of hope that the vaccine development will propel the markets forward. This is due to the fact that the widespread availability of the vaccine will mean that businesses will be able to operate more normally, which will increase the demand for goods and services. This will in turn create jobs, which will help to bolster consumer confidence and stimulate the economy.
The prospect of fiscal stimulus is also a major plus, as it will provide a much needed boost to the economy. With the current recovery looking fragile, many believe that fiscal stimulus will be necessary in order to ensure continued economic growth. We’ve already seen some signs of this, with the second round of stimulus checks being sent out earlier this year.
Finally, the Federal Reserve’s ultra-easy monetary policies, which they have adopted in response to the pandemic, are expected to also contribute to market buoyancy. This is a result of the low interest rates that have been enforced, making it cheaper for companies to borrow money for business purposes.
All of these factors combined mean that the end of the year looks promising for equities. However, it’s important to remember that no one can predict the future, and the year ahead is sure to bring new and unexpected challenges. It’s important to remain vigilant and to have a good strategy in place to ensure that you can take advantage of any opportunities and avoid any potential pitfalls.