![\"Raiz](\"https:\/\/raizinvest.com.au\/investors\/wp-content\/uploads\/2019\/05\/market-update-header-new.jpg\")
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14-04-20<\/em><\/p>\n From George Lucas, Raiz CEO<\/em><\/p>\n <\/p>\n This week COVID-19 continued to cause upheaval across the globe. In the US, another $2.3 trillion was added to stimulus measures aimed at softening the virus\u2019 impact on the US economy. This time, the focus of the stimulus was corporates, giving the US Federal Reserve more fire power in buying up US corporate debt. Asian markets reacted well to this new stimulus.<\/p>\n More broadly, the size of the stimulus packages coming out of the US, Europe, UK and Australia dwarf the stimulus packages that were rolled out during the global financial crisis and indicate how significant the economic effect of COVID-19 will be on output and unemployment worldwide.<\/p>\n <\/p>\n The unprecedented global impact of COVID-19 makes last week\u2019s rebound in equity markets so surprising. On the plus side, the rally partly reflects hopes that the peak in pandemic may be close. On the other hand, large increases in equity prices are quite common after major corrections.<\/p>\n In short, it\u2019s hard to read much into the rally. That\u2019s because it\u2019s difficult to determine how much economic bad news is currently priced into the market given the unprecedented fiscal stimulus currently propping up the global economy. Indeed, governments themselves are finding it hard to forecast the pandemic\u2019s economic impact as the multiple rounds of stimulus being rolled out makes clear. Governments around the world are all playing catch up with COVID-19 at the moment.<\/p>\n <\/p>\n Ultimately, COVID-19\u2019s full economic impact will become clearer when social-distancing restrictions are wound back and business starts to get back to normal. It\u2019s hard to predict when this will be.<\/p>\n Air travel provides a case in point. With airlines grounded due to COVID-19, the International Air Transport Association (IATA) has projected a possible hit to worldwide revenues of up to $113bn this year \u2013 20 per cent of 2019\u2019s total revenues. It\u2019s far from certain when things will return to normal.<\/p>\n However, what is clear is that air travel will not return to anything resembling business as usual until a vaccine is readily available in 12 to 18 months\u2019 time. Until that point, this will have flow-on effects for domestic airlines, hotels, restaurants, bars and any tourist related industry linked to international air travel.<\/p>\n <\/p>\n With so much uncertainty, the recent market rebound relies on the belief that governments are getting it right with their stimulus packages. That\u2019s what largely occurred during the GFC.<\/p>\n But there\u2019s no guarantee they are getting it right. This economic downturn is not a financial crisis, but a shut down in consumer ability to buy and travel.<\/p>\n <\/p>\n <\/p>\n Important Note: <\/strong>The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website.<\/em><\/p>\n Investors only:<\/strong> The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products.<\/em><\/p>\n General advice warning: <\/strong>The information contained in this Document is general information only. It has been prepared without taking account any potential investors\u2019 financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" 14-04-20 From George Lucas, Raiz CEO Global COVID-19 emergency rolls on This week COVID-19 continued to cause upheaval across the globe. In the US, another $2.3 trillion was added to stimulus measures aimed at softening the virus\u2019 impact on the US economy. This time, the focus of the stimulus was corporates, giving the US […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[1],"tags":[],"yst_prominent_words":[2701,2698,2623,1030,957,2699,299,332,2042,386,947,303,297,2011,151,940,2700,2680,2675,1468]}Global COVID-19 emergency rolls on<\/h3>\n
Stocks rally despite coronavirus pandemic<\/h3>\n
When will the global economy recover?<\/h3>\n
Govts need to get COVID-19 response right<\/h3>\n
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