Top 4 Market Concerns of COVID-19

Of course, social, global, and economic events, such as the pandemic crisis and other ongoing world circumstances, can and will have an impact on the market. However, as we’ve seen during challenging market conditions before, stocks and the market should still rebound over time.  

The market has stabilized, but ebbs and flows are an expected part of COVID-19 recovery. Keeping this in mind, consider the following factors when analyzing current market trends and performance through the lens of COVID-19.  

Freeing-Up from Lockdowns – The global economy should start improving as a whole now that lockdown constraints have begun to lift. As people resume business practices and activities, particularly as it pertains to import, export, travel, and more, life will start to move into a ‘new normal’ phase. The US markets will respond in kind as the national and international communities come out of isolation. 

Congressional and Federal Reserve Stimulus – Two of the main reasons the market survived the pandemic was due to the influx of $2.5 trillion of monies and other liquid assets that Congress and the Federal Reserve infused into the economy as aid and stimulus packages to businesses, individuals, and more. It remains to be seen what impact this infusion will have over time. Still, fortunately, the government’s actions did indeed help stabilize both the economy and markets.  

Similar to Prior Recessions – While this particular crisis is unprecedented, the market has performed remarkably similar to recessions and other economic downturns. Due to the consequence of remote workers and stimulus, after the initial scare, the market rebounded more quickly than initially expected. 

Bond Markets, Interest Rates, and Stabilizing – In the near term, there will be substantial issuance of government bonds. One reason is the need for the government to increase the debt by $3 trillion since it has increased spending, in addition to reserves, to manage the COVID-19 crisis. Interest rates are predicted to remain low for the foreseeable future as the markets continue to stabilize.  

 Ultimately, steeling yourself for market volatility and staying the course is the best plan of action as we navigate through COVID-19. If you have any concerns regarding the financial impacts of COVID-19, we’re here for you. Please email us or call our Pittsburgh office at 412-781-7100 or Greensburg at 724-836-7001 to be directed to a member of our team. 

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