Global stocks had outstanding returns in major markets in Q2 2020, triggered by America’s biggest economy, as major Wall Street stocks recorded their best quarter in more than 20 years boosted by monetary policyholders’ stimulus packages at enormous levels.
The S&P 500 index gained more than 20% in Q2 2020, printing the largest gain since the final quarter of 1998. Emerged and emerging market stock prices overall also gained about 17% in the second quarter, according to MSCI’s All-Country World index.
Europe’s Stoxx 600 also printed an upside of 13%, with MSCI’s Asia-Pacific index up 15%.
“Stimulus measures announced by central banks around the world, including a series of interventions by the US Federal Reserve to soothe unsteady markets, helped to lift stocks in April,” Max Kettner, strategist at HSBC told FT. Rising hopes for a rapid recovery in major economies helped to keep the momentum going later in the quarter.
“Equities rebounded significantly in the second quarter with more than three-quarters of the losses in Q1 2020 already recovered,” Max Kettner added.
However, present macros, shows that the recent resurgence on COVID-19 cases could limit the bullish trend in Q3 2020
“The resurgence in the virus is not a surprise,” said Ethan Harris, an economist at Bank of America. “However, downside risks are growing.”
Mr. Harris said he expected, “some reversal in economic activity in the hotspots as rules are reluctantly reversed and people become more cautious”. Goldman Sachs research indicates lockdowns are tightening or the easing of restrictions has been put on hold for 40% of the US population.