NEW YORK, June 26 ― Markets for stocks and other risky assets could suffer a second swoon if the coronavirus spreads more widely, lockdowns are reimposed or trade tensions surge again, the International Monetary Fund (IMF) warned yesterday. Equity markets tailspinned into bear market territory in...
The IMF warned that markets for stocks and other risky assets could suffer a second swoon if the coronavirus spreads more widely, lockdowns are reimposed or trade tensions surge again. — Reuters pic
Equity markets tailspinned into bear market territory in record time earlier this year as the virus and related lockdowns pounded sentiment, but they have broadly rallied from their March 23 low. The S&P, which fell 34 per cent in just 23 trading days, has been boosted by central bank support, and is now roughly 10 per cent off its record high.
“We worry about scarring in the economy, meaning the crisis might be longer than expected and deeper than expected,” said Adrian. “Scarring is due to the high level of unemployment and the potential for insolvency. These are difficult to reverse.”
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